Former CIO Sees Drone Take-off Opportunity
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Reykjavik has a pioneering drone delivery service that will reshape logistics and the way that cities operate.
“Electric plays a huge part in the change in short-range aviation,” says Maron Kristofersson, former CIO and now CEO and founder of Aha.is, a logistics company that is pioneering drone-based deliveries.
Aha.is provides online marketplace services in Iceland. Its fleet of electric cars and now drones deliver take-out food, groceries, and goods for retailers and the hospitality sector.
“We are helping consumers buy from local firms and helping local firms give a better service than Amazon,” Kristofersson told CIOs and CTOs at the .NEXT Conference in Copenhagen, Denmark. Kristofersson founded the business in the summer of 2011 following a career in business technology leadership. His experiences in hotel, telecoms, and commodities fueled his desire to create a new type of retail and logistics business and take the step from CIO to CEO.
In August 2018, Aha.is gained the license to launch its drone service along 13 routes in the Icelandic capital, Reykjavik. Drones were the latest transformation of the delivery sector led by Aha.is in Iceland; the company had already ditched the internal combustion engine and moved to electric vehicles.
Kristofersson speaks passionately about being more than a delivery company, but being a business with a purpose: delivering in a way that reduces harm to the natural environment and providing an opportunity for local businesses to compete against global giants like Amazon.
“A shopping center is a huge warehouse,” he says of how he and Aha.is is looking at retail through a different lens. Whilst the retail sector is caught in a trap of seeing the physical store as a different channel to its online service, Aha.is sees localism combined with efficient delivery as an opportunity.
“What do people really want from delivery? Customers care about the package and not the delivery method,” he says. Kristofersson adds that customers rarely want to pay for delivery and this has a greater impact on local traders. Major global leaders, with their scale, can offset the cost of delivery, but local traders may not have the staff resources to add delivery to their services. Aha.is, with the use of drones, believes it is countering this challenge.
The logistics sector has always found the last mile—to your home or business—the greatest challenge and is often the most expensive part of the delivery chain. Kristofersson agrees with this sentiment, and as a technology leader, his instinct is to experiment with technology as the solution comes to the fore. Kristofersson believes mechanization will become essential to the last mile and expects delivery to be a mix of drones and robots in the near future.
This vision will require a rethinking of the infrastructure that communities need. Just as the tarmac road became the norm for civic infrastructure as travel and transport moved from horse-drawn to the oil-fired engine, drones and robots will require communities to rethink their infrastructure.
“We are building a drone port on the roof of our office in the center of the traffic in Reykjavik,” he says. The company is also delivering by wire line into customers’ gardens, so could the family garage one day be replaced by a drone landing pad?
“The perfect delivery drone does not exist, but the technology to make it does,” Kristofersson says, adding that the license Aha.is has enables it to drone deliver to 44% of the Icelandic capital, which equates to 22,500 homes. Reykjavik has a population of just over 122,000.
“Drones are getting cheaper and safer all the time,” he says of the first mover advantage Aha.is has. “Cars are complex; the infrastructure they require is complex, and so is the regulation.” Drone regulation is necessarily complex, but the freedom of the skies reduces the need to build and maintain roads, parking, tolls, and refueling infrastructure.
“We are focused on the early adopter market as they understand our offering well and will tell other similar people,” he says.
Aha.is an example of how startups can thrive when they work in collaboration with regulators. “We have never taken off without permission from the flight tower,” Kristofersson says. Aha.is works closely with the police, city, and airport regulators to develop the license and ensure its service works for Reykjavik and the business.
“We worked with the regulators to get the first two routes that were safe and that allowed us to start testing the business,” he says of the initial service.
First mover advantage is not only beneficial to Aha.is; it will help other cities and organizations adapt to the take-off of drones. Aha.is is already sharing the experience from its service to help drive regulatory implementation internationally.
“We get 10 to 20 days of bad weather a year in Reykjavik, so we always have a chance to test in rain and wind,” he says with a wry smile.
“You will see a complete change in the way goods are moved, and not just from startups, but also from established organizations.”