UPS just beat out Amazon, FedEx, and Uber to make America's first revenue-generating drone delivery

Courtesy of Ryan Davis/UPS

UPS just started America's first drone delivery route.

• UPS, in partnership with drone technology company Matternet, began its daily drone delivery of medical supplies within the WakeMed Raleigh campus on Tuesday.
• This cuts the drone delivery time of crucial medical specimen from half an hour to just over three minutes.
• It is the first revenue-generating drone delivery ever - and the first commercial application of the much-hyped and highly regulated technology.
• UPS is part of a public-private US Department of Transportation drone testing program that rolled out in spring 2018. Amazon, which has made highly-publicized moves into drone testing, was not included in the program.

Moving medical samples around WakeMed Raleigh's sprawling medical campus can sometimes take up to 30 minutes in traffic. That can be challenging when the material being moved is life-saving specimen like blood or organ samples.

But today, that commute has been cut to three minutes and 15 seconds - thanks to drone delivery.

UPS, in collaboration with drone technology company Matternet, made its first revenue-generating delivery of medical samples at WakeMed Raleigh on Tuesday. The Federal Aviation Administration and North Carolina Department of Transportation provided oversight.

It's a major step for proving the worthiness of the highly regulated and much-hyped technology.

Courtesy of Ryan Davis/UPS

A UPS drone.

"This particular use case of healthcare specimens within the healthcare campus is not only critical in a just-in-time event, but it could be a life-changing event," Bala Ganesh, vice president of the Advanced Technology Group at UPS, told Business Insider. "The capabilities we bring to the table adds on to the capabilities for healthcare to provide better service and patient care to their patients."

The drone's first revenue-generating route

This is the first revenue-generating drone delivery in the US. "This is not a demo or a test," Ganesh said.

UPS will make fewer than 10 drone deliveries per day around WakeMed, but that has potential to scale up.

Read more: UPS CEO David Abney reveals why the logistics giant hasn't pushed into one of delivery's fastest-growing sectors

It's the first time we've seen drones actually make money in the US, rather than just act as one-time PR stunts or tests.

Companies ranging from pizza purveyor Domino's to retailer Amazon have all made highly-publicized pushes into drone delivery. But none of them have managed to establish a regular, revenue-generating business off of drones.

The sluggishness in drone technology is due partially to government regulation. As the BBC reported in December, governments worldwide are worried about the potential for "rogue drone use" and the safety concerns that could stem from drones malfunctioning and falling from the sky.

But, last year, the Department of Transportation (DOT) made a major step in providing better regulations for realizing drone's commercial use.

In May 2018, the DOT announced 10 state, local, and tribal governments approved to work with private corporations to test drone technology. The North Carolina Department of Transportation, working with UPS and Matternet, is one of the participants - though UPS' involvement in the program was previously undisclosed.

Uber, FedEx, Intel, and Qualcomm, as well as startups like Airmap and Flirtey, are other known participants. Amazon was not selected for the program.

Courtesy of Ryan Davis/UPS

A WakeMed doctor with UPS-delivered samples.

Other companies and governments in the program are focusing on areas like aircraft and airport runway inspections, drone landing stations and ports, and deliveries.

Ganesh said UPS, which already has a robust medical supply chain network, is chiefly interested in the healthcare applications of drones. In 2016, UPS partnered with health partnership GAVI and drone company Zipline to deliver blood samples to remote areas in Rwanda.

Experts say the $10 trillion global healthcare industry can be seriously bolstered by drone delivery technology, particularly when servicing disaster zones or remote areas with medical supplies.

"Our focus is on healthcare, just-in-time, real urgent movements, life-changing events in hard-to-reach locations," Ganesh said. "That's our primary focus because that's where we believe there's a new market, a new innovative use case that has not been satisfied today."