U.S. GOVERNMENT PUBLISHING OFFICE

26–518 WASHINGTON : 2018

DISRUPTER SERIES: DELIVERING TO CONSUMERS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON DIGITAL COMMERCE AND 

CONSUMER PROTECTION 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

MAY 23, 2017 

Serial No. 115–35 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER PROTECTION

ROBERT E. LATTA, Ohio 

Chairman 

GREGG HARPER, Mississippi 

Vice Chairman 

FRED UPTON, Michigan 

MICHAEL C. BURGESS, Texas 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

DAVID B. MCKINLEY, West Virgina 

ADAM KINZINGER, Illinois 

GUS M. BILIRAKIS, Florida 

LARRY BUCSHON, Indiana 

MARKWAYNE MULLIN, Oklahoma 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

GREG WALDEN, Oregon (ex officio) 

JANICE D. SCHAKOWSKY, Illinois 

Ranking Member 

BEN RAY LUJA ́ N, New Mexico 

YVETTE D. CLARKE, New York 

TONY CA ́ RDENAS, California 

DEBBIE DINGELL, Michigan 

DORIS O. MATSUI, California 

PETER WELCH, Vermont 

JOSEPH P. KENNEDY, III, Massachusetts 

GENE GREEN, Texas 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

C O N T E N T S 

Page 

Hon. Robert E. Latta, a Representative in Congress from the State of Ohio, 

opening statement ................................................................................................ 1 

Prepared statement .......................................................................................... 2 

Hon. Janice D. Schakowsky, a Representative in Congress from the State 

of Illinois, opening statement .............................................................................. 3 

Hon. Joseph P. Kennedy, III, a Representative in Congress from the Commonwealth of Massachusetts, opening statement .................................................... 5 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, prepared statement ........................................................................ 6 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 54 

WITNESSES

Bastian Lehmann, Founder and CEO, Postmates ................................................ 7 

Prepared statement .......................................................................................... 10 

Brian Wynne, President and CEO, Association for Unmanned Vehicle Systems International ............................................................................................... 15 

Prepared statement .......................................................................................... 17 

Harry J. Holzer, John Lafarge, Jr., S.J. Professor of Public Policy, Mccourt 

School of Public Policy, Georgetown University ................................................ 23 

Prepared statement .......................................................................................... 25 

Shyam Chidamber, Chief Evangelist and Senior Advisor, Flirtey ...................... 29 

Prepared statement .......................................................................................... 31 

(1) 

DISRUPTER SERIES: DELIVERING TO 

CONSUMERS 

TUESDAY, MAY 23, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON DIGITAL COMMERCE AND CONSUMER

PROTECTION, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:15 a.m., in room 

2322 Rayburn House Office Building, Hon. Robert Latta (chairman 

of the subcommittee) presiding. 

Members present: Representatives Latta, Harper, Lance, Guthrie, McKinley, Kinzinger, Bilirakis, Bucshon, Mullin, Walters, Costello, Schakowsky, Ca ́ rdenas, Dingell, Matsui, Welch, Kennedy, 

Green, and Pallone (ex officio). 

Staff present: Mike Bloomquist, Deputy Staff Director; Blair 

Ellis, Digital Coordinator/Press Secretary; Melissa Froelich, Counsel, Digital Commerce and Consumer Protection; Adam Fromm, Director of Outreach and Coalitions; Giulia Giannangeli, Legislative 

Clerk, Digital Commerce and Consumer Protection/Communications and Technology; Bijan Koohmaraie, Counsel, Digital Commerce and Consumer Protection; Paul Nagle, Chief Counsel, Digital 

Commerce and Consumer Protection; Madeline Vey, Policy Coordinator, Digital Commerce and Consumer Protection; Everett 

Winnick, Director of Information Technology; Michelle Ash, Minority Chief Counsel, Digital Commerce and Consumer Protection; Jeff 

Carroll, Minority Staff Director; Lisa Goldman, Minority Counsel; 

Caroline Paris-Behr, Minority Policy Analyst; and Matt 

Schumacher, Minority Press Assistant. 

OPENING STATEMENT OF HON. ROBERT E. LATTA, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO 

Mr. LATTA. Well, good morning. I would like to call the Subcommittee on Digital Commerce and Consumer Protection to order, 

and the chair now recognizes himself for 5 minutes for an opening 

statement. 

Good morning, and welcome again to the Digital Commerce and 

Consumer Protection Subcommittee hearing. Today’s hearing is a 

continuation of our Disrupter Series in which our subcommittee explores emerging technology and all the ways innovation is reshaping industries. The focus of our hearing this morning is product 

and package delivery, and I am excited to learn about the new, innovative ways businesses are interacting with consumers and how 

2 

1http://www.cnbc.com/2016/04/08/this-is-why-ohio-is-becoming-the-e-commerce-capital.html 

technology is being leveraged to deliver goods quickly and safely to 

consumers. 

The U.S. e-commerce market is projected to reach $500 billion by 

2018 and is expected to see substantial growth by 2020. When we 

think of e-commerce rarely do we consider its physical footprint, 

the process of actually fulfilling the online order, and facilitating 

its delivery. However, my home State of Ohio has become somewhat of an e-commerce hub. Ohio offers favorable geographic location, a workable transportation network, a business-friendly regulatory framework, and skilled laborers. Because of these key items, 

Ohio is home to roughly 760 warehouse establishments including 

many e-commerce fulfillment operations. 

In today’s digital, on-demand economy, consumers have come to 

expect flexibility and quick delivery. In fact, a 2016 survey indicates that same-day delivery is a priority for consumers and that 

consumers want to have options for where their deliveries go, 

whether that be through their office or some other personalized 

pickup point. Technologies such as drones and other automated 

couriers offer innovative approaches to meeting these demands. For 

example, drones allow fast and efficient delivery because they have 

the ability to traverse difficult terrain, fly over bodies of water, and 

avoid the natural traffic congestion that slows traditional delivery. 

I look forward to hearing more about the use of drones and other 

automated delivery systems from our witnesses today and how 

such technological advancements are being used to meet consumer 

demands and what the safety issues are. I also look forward to exploring how we as policymakers can promote innovation and address any regulatory barriers. 

Again I want to thank our witnesses for being with us today as 

we have this discussion today. And I have a couple minutes left 

and I recognize the vice chairman from Mississippi. 

[The prepared statement of Mr. Latta follows:] 

PREPARED STATEMENT OF HON. ROBERT E. LATTA

Good morning and welcome to the Digital Commerce and Consumer Protection 

subcommittee hearing. Today’s hearing is a continuation of the Disrupter Series in 

which our subcommittee explores emerging technology and all the ways innovation 

is reshaping industries. The focus of our hearing this morning is product and package delivery. I am excited to learn about some of the new innovative ways businesses are interacting with consumers and how technology is being leveraged to create faster, cheaper and more flexible delivery options. 

The U.S. e-commerce market is projected to reach $500 billion by 2018 and is expected to see substantial growth by 2020. When we think of e-commerce rarely do 

we consider its physical footprint- the process of actually fulfilling the online order 

and facilitating its delivery. However, my home state of Ohio has become somewhat 

of an e-commerce hub. Ohio offers favorable geographic location, a workable transportation network, a business friendly regulatory framework and skilled laborers. 

Because of these key items, Ohio is home to roughly 760 1 warehouse establishments, including e-commerce fulfillment operations for Amazon, J.C. Penny, Home 

Depot and many more. 

In today’s digital, on-demand economy, consumers have come to expect flexibility 

and quick delivery. In fact, a 2016 survey indicates that same-day delivery is a priority for consumers and that consumers want to have options for where their deliveries go- whether that be their office or some other personalized pickup point. Technology, such as drones and other automated couriers, offer innovative approaches 

to meeting these demands. For example, drones allow fast and efficient delivery beVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
3 

cause they have the ability to traverse difficult terrain, fly over bodies of water and 

avoid the natural traffic congestion that slows traditional delivery. 

I look forward to hearing more about the use of drones and other automated delivery systems from our witnesses today and how such technological advancements are 

being used to meet consumer demands. I also look forward to exploring how we, as 

policymakers, can promote innovation and address any regulatory barriers. Thank 

you all for joining us today for this important discussion. 

Mr. HARPER. Thank you, Mr. Chairman, for calling today’s hearing, the latest in the subcommittee’s Disrupter Series, to examine 

the development and implementation of innovative delivery services for businesses and consumers. One aspect we will focus on is 

the potential commercial application of product delivery systems 

via unmanned aerial aircraft systems, also referred to as UAS or 

drones, and how to ensure the safe integration of these services 

into the national airspace system. 

In May of 2015, Mississippi State University, which is in my congressional district, and the Alliance for Systems Safety of Unmanned Aircraft Systems through Research Excellence, or ASSURE for short, was selected by the Federal Aviation Administration to be the lead for the National Center of Excellence for Unmanned Aircraft Systems. 

Mississippi State University’s ASSURE is a consortium of academic institutions along with government and industry partners 

tasked with identifying and researching issues critical to the safe 

integration of UAS into the national airspace system, and developing policy recommendations on the expanding use of unmanned 

aircraft. 

Although only 2 years old, ASSURE’s UAS research is already 

influencing the FAA’s thoughts regarding small UAS flight operation over people and property. Additionally, ASSURE is engaged 

in an aggressive research program to support beyond visual line of 

sight operations. Safety concerns regarding flights over populated 

areas and beyond visual line of sight must be resolved before safe 

and routine UAS delivery services are part of our daily lives. And 

a successful business case can be made after that for continued investment in this innovative idea. 

The ASSURE UAS air to ground collision study released in April 

is challenging previous perceptions regarding human injury in the 

event of a small UAS impact. This project will be continuing as a 

second phase starting in June, testing numerous types of UAS and 

increasing the human impact component of the research. I think it 

is crucial that we continue that. 

I am pleased to have this hearing and look forward to hearing 

what the witnesses have to say, and with that I yield back. 

Mr. LATTA. Thank you very much. The gentleman yields back. I 

yield back the balance of my time, and the chair now recognizes for 

her opening statement the gentlelady from Illinois, the ranking 

member of the subcommittee. 

OPENING STATEMENT OF HON. JANICE D. SCHAKOWSKY, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF ILLINOIS 

Ms. SCHAKOWSKY. Thank you, Mr. Chairman. Many consumers 

today like to have their purchases delivered directly to their homes. 

The rise in online shopping and mobile purchases has meant more 

4 

business for the post office delivery workers, couriers, truckers, and 

anyone else involved in moving goods from the warehouse to the 

doorstep. 

Given the rise in home delivery, it is no surprise that companies 

are involved in this space. Today we will hear about a few of those 

innovations, specifically drones and delivery robots. I have no 

shortage of basic questions about the technologies. 

How does the delivery robot know when to cross the street? How 

worried should I be about these things running into me? One of my 

staffers saw this cooler-looking object with a flag on it next to him, 

and it startled him, on the sidewalk. And researchers and firms 

will continue to work through technological challenges as they 

work to improve automation. Meanwhile, Congress needs to work 

through the policy changes that technologies like this represent. 

This is yet another hearing in our Disrupter Series, and disruption can be good or bad depending on how you like the current system and what it is being replaced with. In past hearings we have 

weighed concerns about safety, privacy, and other protections. One 

topic that I don’t think we hit on enough is the impact on our 

workforce. 

It is a simple reality disruptive technologies like automation will 

disrupt some American livelihoods. How would we adjust if in a 

few years we no longer need delivery workers? This is not a hypothetical question. Today there are many workers without college 

degrees who used to have good jobs with decent income but now 

struggle with long periods of unemployment and lower earning potential. The American economy as a whole might be growing, but 

Americans in certain sectors feel like they are falling further and 

further behind. 

How do we address this? Clearly, blocking the adoption of new 

technology cannot be a long-term strategy or solution. We need to 

look carefully at our education system. Are today’s students acquiring skills that will be still useful as automation progresses? For 

Americans currently in the workforce, how do we assist worker 

when their existing skills fit fewer and fewer available jobs? 

We need a robust system of assistance and job training to ensure 

that Americans can maintain a decent standard of living. We must 

also ensure that protections keep up with new technology. Old safeguards don’t go out the window when a new technology appears. 

Workers deserve dignity whether they work in conventional delivery or work on automated delivery systems. That means fair 

wages, a safe workplace, and the right to collective bargaining. 

Consumers need assurances of privacy, safety, and fairness 

whether they are buying a product in a store and ordering home 

delivery by a drone or via mobile app. The challenge of adapting 

to technological changes is by no means unique to the delivery sector, but automation and delivery advances, I believe now is the 

time to wrestle with difficult policy questions. As the Subcommittee 

on Digital Commerce and Consumer Protection, our job is not to 

just marvel at cool new stuff, though it can be fun to see what is 

being developed, we must get beyond the novelty factor and determine the real policy issues at play and legislate accordingly. 

I look forward to hearing our witnesses’ perspectives on development and consumer delivery. I hope that you can provide some inVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
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sight as we determine how federal policy keeps up with the latest 

technology, and I yield back. 

Mr. LATTA. Thank you very much. The gentlelady yields back. 

The chairman of the full committee, the gentleman from Oregon, 

will not be making an opening statement. Is there anyone on our 

side that would like to claim his time? If not, the chair would then 

recognize the gentleman from Massachusetts for 5 minutes. 

OPENING STATEMENT OF HON. JOSEPH P. KENNEDY, III, A 

REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH OF MASSACHUSETTS 

Mr. KENNEDY. Thank you, Mr. Chairman, and I want to thank 

the ranking member Ms. Schakowsky as well for their continued 

commitment to this series and for encouraging this conversation. 

To the witnesses today, I greatly appreciate you taking the time to 

join us and I hope you will bear with us as we attempt to keep up 

with the rapid pace with which you innovate. Thank you for being 

here. 

Technology is in its infancy and provides a rare opportunity for 

bipartisan agreement in supporting its growth and your companies. 

And with increased funding for our scientists and investments in 

STEM education, we can ensure that this critical R&D continues 

and ultimately consumers benefit in ways that we have yet to even 

imagine. That future is as bright as it is exciting. 

But greater AI, machine learning, and automation can bring with 

it significant dislocation in our labor markets and with that job 

loss, as with it comes greater social responsibility to those who are 

left behind. That is part of the conversation that we need to be 

having in this subcommittee. As Congress defends our small businesses and traditional industries, we need to prepare for a future 

where drones may replace deliverymen, where computers replace 

cashiers, where even apps may replace doctors. And that is why we 

have to extend STEM education into every single school regardless 

of ZIP Code, why we need to begin investing in workforce programs 

for all ages, today not tomorrow. 

But balancing our proud history and our bright future will require vigilance and engagement at all levels of government and the 

private sector and I would greatly appreciate hearing from our witnesses about how we prepare our working families for the role in 

which you view federal policy and helping to strike this balance in 

encouraging you to innovate and solve challenges that we have yet 

to even design or yet to imagine, while ensuring that we remain 

and retain a talented, dedicated, educated workforce that in fact is 

going to power that growth to begin with. 

And with that I would reserve the balance of my time or yield 

it to the ranking member of the full committee if he is ready for 

it. 

Mr. LATTA. Thank you very much. The ranking member of the 

full committee is recognized. 

6 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman. I don’t know if I can 

put this all in, in the time allotted, but if not I will just ask you 

to include it in the record. 

This hearing will explore the new and innovative ways consumers will receive goods in the future and in some cases right 

now. Today, 2-day delivery of a package is commonplace and now 

we are seeing on-demand delivery in under an hour. These deliveries are not just being carried out by people, but now also by robots, and in the future drones. 

As I have stated at past hearings regarding new technologies, 

privacy, data security, and cybersecurity must be baked into the 

devices and the software. We only need to look to the front pages 

to see that cyber attacks such as Russian hacking have become an 

everyday occurrence. Creators and manufacturers of internet-connected technology must take responsibility for mitigating this problem. 

This committee has had more than ten hearings as part of the 

Disrupter Series. These hearings have given members a taste of 

the latest technologies that are changing how our economy works, 

and this exposure is important. However, I am hoping at today’s 

hearing we can begin to discuss how these disruptions affect the 

American worker. 

While no one is advocating for slowing down innovation and in 

fact we are continually pushing for more innovation, we should not 

forget that these new disrupters can bring challenges. As policymakers we should acknowledge that some of the ways industries 

mechanize and automate can also cause job loss or wage loss, so 

while the national economy benefits individual workers may suffer. 

Disruption is nothing new. While the agriculture sector has become vastly more productive, it now is a smaller percentage of the 

overall workforce. And as this committee is well aware, the total 

number of manufacturing jobs has shrunk, in part, due to automation. The automation we are discussing today could, for example, 

have an impact on truck drivers and delivery services. 

Economists have studied long haul truck driver jobs and believe 

these jobs are at risk as driving becomes more automated. And 

today, 1.7 million people are employed driving these routes. They 

are good wage jobs that will be displaced, and this hearing is mostly focused on short distance delivery services, which employs over 

one million workers, so some of these jobs are surely at risk too. 

And finally, I don’t want to be an alarmist and in fact I believe 

we as a society can meet the challenge, but we need to be thinking 

about the potential job impacts now so we can prepare for the future. We need to revisit whether our education systems are preparing the next generation for the shifting workplace, we need to 

ensure that retraining programs are effective, and we need to invest more in research and development to ensure that the United 

States continues to lead the world in innovation. 

It is time we try to plan ahead instead of letting ourselves be 

caught off guard when it is too late. And I yield back. 

7 

Mr. LATTA. Thank you very much. The gentleman yields back 

and that will conclude the member opening statements. The chair 

would like to remind all members that pursuant to the committee 

rules, all members’ opening statements will be made part of the 

record. 

Again I want to thank all of our witnesses for being with us 

today and taking time to testify before our subcommittee. Today’s 

witnesses will have the opportunity to give opening statements followed by a round of questions from our members. 

Our witness panel for today’s hearing will include Mr. Bastian 

Lehmann, founder and CEO of Postmates; Mr. Brian Wynne, president and CEO at Association for Unmanned Vehicle Systems International; Dr. Harry Holzer is a John LaFarge Jr., S.J. Professor of 

Public Policy at the McCourt School of Public Policy at Georgetown 

University; and Mr. Shyam Chidamber, Chief Evangelist and Senior Advisor at Flirtey. 

We appreciate you all being here with us today. And we will 

begin the panel discussion today with Mr. Lehmann and you will 

be recognized for 5 minutes to give your opening statement. And 

just pull that mic right up to you and thanks for being here with 

us today. 

STATEMENTS OF BASTIAN LEHMANN, FOUNDER AND CEO, 

POSTMATES; BRIAN WYNNE, PRESIDENT AND CEO, ASSOCIATION FOR UNMANNED VEHICLE SYSTEMS INTERNATIONAL; 

HARRY J. HOLZER, JOHN LAFARGE, JR., S.J. PROFESSOR OF 

PUBLIC POLICY, MCCOURT SCHOOL OF PUBLIC POLICY, 

GEORGETOWN UNIVERSITY; AND, SHYAM CHIDAMBER, 

CHIEF EVANGELIST AND SENIOR ADVISOR, FLIRTEY 

STATEMENT OF BASTIAN LEHMANN 

Mr. LEHMANN. Chairman Latta, Ranking Member Schakowsky, 

and distinguished members of the Subcommittee of Digital Commerce and Consumer Protection, let me begin by stating that our 

thoughts and prayers are with the people of Manchester in the 

U.K. this morning. 

As a co-founder and CEO of Postmates, we recognize the power 

of global networks to overcome intolerance and power opportunity, 

so it is a pleasure to join you and my distinguished co-panelists 

this morning for a discussion on how cutting edge technologies and 

innovation are transforming traditional logistics and delivery networks. 

While advances made by on-demand platforms has certainly disrupted traditional models of how products and goods move across 

the country, it is important to start our discussion with an overview of how the nation’s leading on-demand logistics provider, 

Postmates, the company I co-founded just 6 years ago, is disrupting 

the rate and pace at which commerce is flowing in your own backyards and districts. 

When Postmates is described as a leader in on-demand delivery, 

we quite literally mean that. Through the tap of a button on your 

phone, the platform enables anyone to get anything from their 

neighborhoods delivered to their doorsteps in just a couple of minutes. Where some logistics companies try to build a warehouse outVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
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side of a city and funnel goods into it, we believe in a simple philosophy. Our cities, our towns, our communities, they are our warehouses. They are home to unique talents and creative expertise 

that craft and curate high quality products, food, and merchandise 

that power our economies. 

We aim to understand the inventory available in each given 

town, index each of its product offerings, and connect you directly 

to that experience by having a fleet of couriers, which we refer to 

as Postmates, deliver this inventory. We allow you to find and 

order from any restaurant or store in your city. 

That means in addition to delivering prepared food, the platform 

is also empowering everyone from public school teachers ordering 

supplies to their classrooms to helping families of the elderly ensure groceries or medicines are delivered to their doorsteps. And 

with over 65,000 active Postmates across 45 major metropolitan 

markets covering 200 U.S. cities, our platform facilitates more than 

two million deliveries per month. This year alone we are on track 

to facilitate $1 billion worth of total goods sold on the Postmates 

platform. And since we started the platform, our Postmates have 

earned over $300 million in income. 

But this is just the beginning. The total sales of food and gro- ceries last year in the United States alone was nearly $1.4 trillion, 

but less than 1.5 percent of that was sold online or through cell 

phones. That includes ourselves, our competitors, even big pizza delivery companies. 

With over 10,000 merchants throughout the country from major 

brands like Chipotle, Apple, and Starbucks to local pharmacies and 

corner bakeries, Postmates is able to strike both local and national 

partnerships that continue to power sales throughout local economies. That is the power of Postmates and the on-demand economy. 

With each delivery we generate critical sales for merchants in the 

towns each of you represent. 

But that story of economic empowerment is also told through the 

lens of flexibility we offer our fleet of Postmates making each delivery. Currently, an independent contractor-based model provides ondemand platforms like Postmates and the couriers themselves optimal flexibility. By empowering our Postmates to control how and 

when they offer their service on our platform, we enable students 

to supplement their income between classes, aspiring entrepreneurs to save capital for new business opportunities, or parents 

to earn a little extra by completing deliveries after dropping their 

kids at school or soccer practice. All told, these sales and earnings 

are broadening the tax base which are being reinvested right back 

into our communities. 

So we started asking ourselves a key question. Can we expand 

this base of earnings all while continuing to rev the engines of economic impact in your districts? How can we do right by our couriers in helping them earn higher incomes, and how can we manage 

the on-demand logistics in particular dense urban and suburban 

populations? One such way led us to an experiment with what I 

like to refer to as sidewalk class robotics. 

As pointed out in a recent piece in the Harvard Business Review, 

executives have to cut through a lot of hype around automation 

and ‘‘leaders need a clear-eyed way to think about how these techVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
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nologies will specifically affect their organizations.’’ The right question isn’t which jobs are going to be replaced, but rather what work 

will be refined, and how. And this does not need to be a terrifying 

exercise that evokes imagery of Terminator or a world where an 

entire labor force gets displaced. 

So we started looking at the trend lines to begin with a cleareyed assessment of our landscape. We have people who use cars, 

bikes, scooters, motorcycles, or walk to complete a delivery and 

each have a different strength and suitability for different deliveries. 

But we also noticed that in particular dense or crowded clusters 

of downtown neighborhoods, the distance between popular delivery 

zones and popular restaurants or stores could often be quite short. 

While the Postmates platform is ready and equipped to make deliveries, sometimes these short distance stretches aren’t as financially 

advantageous to our couriers when compared to longer distance deliveries, and tips are often based on the distance traveled. 

One way to ensure the continuity of short distance deliveries 

while reserving our hardworking Postmates for longer distance deliveries has been experiencing with robots. Through partnerships 

with robotic companies on both the east and west coasts, we have 

started to be able to measure how robots may be able to optimize 

delivery times when compared to current numbers. Most importantly, we can focus our fleet of Postmates to complete deliveries 

that are likely to connect them to incomes at a much higher rate. 

Our thesis is then that with both human hand and robotic operators on the ground, commerce can move at even higher rates with 

more functional ways to make deliveries in each city. In the long 

term, this could ultimately help drive down the overall costs of delivery as the supply of couriers increases. We at Postmates do not 

see a role in which robotics will be the ultimately delivery mechanism, instead taking these incremental and responsible steps to 

test automation without shortchanging our human workforce provides us with three tangible gains. 

Mr. LATTA. Pardon me, Mr. Lehmann. If you could just, we are 

running over right now on your time. If you want to just wrap up 

real quick we would appreciate that. Thank you. 

Mr. LEHMANN. Absolutely. As I said, we don’t believe that just 

robots will be doing deliveries in the future, but we also agree that 

if that happens we have to be aware of a future in where we invest 

into STEM education, where we and Congress should and must 

work to advance a budget which prioritizes improving STEM teaching, expanding access to rigorous STEM courses, addresses bias for 

underrepresented students in STEM, and revitalizing apprenticeship programs in this country to skill up workers no matter their 

age. 

[The statement of Mr. Lehmann follows:] 

10 


26518.001

Congressional Testimony of Bastian Lehmann, Co-Founder & CEO of Postmates 

U.S. HOUSE OF REPRESENTATIVES 

ENERGY & COMMERCE COMMITTEE 

SUBCOMMITTEE ON DIGITAL COMMERCE & CONSUMER PROTECTION 

"DISRUPTING DELIVERY: AUTOMATION & ON-DEMAND PLATFORMS" 

WRITTEN TESTIMONY OF POSTMATES CO-FOUNDER & CEO. BASTIAN LEHMANN 

Chairman Latta, Ranking Member Schakowsky, And distinguished Members of the 

Subcommittee of Digital Commerce and Consumer Protection 

As the Co-Founder and CEO ofPostmates, it is a pleasure to join you and my distinguished 

co-panelists this moming for a discussion on how the landscape of traditional logistics and 

delivery networks arc being transformed by cutting edge technologies and innovation. 

While advances made by on-demand platforms have certainly "disrupted" traditional delivery 

models of how products and goods move across the country-it is important to start our 

discussion with an overview of how the nation's premiere on-demand logistics providcrPostmatcs-is disrupting the rate and pace at which commerce is flowing in your own backyards 

and districts. 

I. BACKGROUND & SCENE SETTING OF THE COMPANY 

When Postmates is described as a leader in on-demand delivery -we quite literally mean that 

through the tap of a button on your phone the platform enables anyone to get anything from 

their neighborhoods, delivered to their doorsteps within minutes. 

While some logistics companies try to build a warehouse outside of a city and funnel goods 

into it- we believe in a simple philosophy our cities and our communities arc our warehouses. 

They arc home to the unique talents and creative expertise that craft and curate high-quality 

products and foods. 

We aim to understand the inventory available in each given town, index each of its product 

offerings, and connect you directly to that local experience by having a fleet of couriers-which 

we refer to as Pas/mates-deliver this inventory. 

Postmates allows you to find and order from any restaurant or store in the city. That means in 

addition to delivering prepared food the platform is also empowering everyone from public 

school teachers ordering supplies to their classrooms, to helping families of the elderly ensure 

groceries or medicines arc delivered to their doorstep. 

And with more than 65,000 active Postmatcs, across 44 major metropolitan markets covering 

300 U.S. cities, our platform facilitates more than 2 million deliveries per month. This year alone 

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Congressional Testimony of Bastian Lehmann, Co-Founder & CEO of Postmates 

we arc on track to facilitate approximately $1 billion dollars worth of total goods sold on the 

Postmatcs platform. 

And since we first started the platform, our Postmates have earned over $300 million in 

income. But that is just the beginning. 

The total sales of food and groceries last year alone in the United States was nearly $1.4 

trillion dollars. But less than t.s•;;, of that was sold online. That includes ourselves, our 

competitors, even big pizza delivery companies. That means the opportunities to power local, ondemand logistics focused on fast deliveries from any type of merchant at scale arc tremendous. 

And with over 10,000 merchant partners throughout the country- from major brands like 

Chipotle, Apple & Starbucks; to local pharmacies & corner bakeries- Postmates can strike both 

local and national partnerships that continue to power sales throughout local economies. 

That's the power of Postmates and the on-demand economy. With each delivery we generate 

critical sales for merchants in the towns each of you represent; we put more time back in the 

ever-busy lives of our customers; and we build new bridges across vast metropolitan geographies 

by connecting the offerings of one neighborhood with another. 

But that story of economic empowerment is also told through the lens of the flexibility we 

otTer our fleet of Postmates making each dclivc1y. Currently an independent contractor based 

model, provides on-demand platforms like Postmates and the couriers themselves optimal 

flexibility. These f1exibilities not only improve economic outcomes for individuals and towns, 

but as a company, we ensure that they have the tools, resources, service support they need to get 

the job done efficiently. By offering supplemental insurance protections for incidents; to the 

ability to deduct a higher number of work related expenses on one's taxes while also working a 

separate full time job-Postmates is committed to investing in the success and growth of this 

network by retaining clear tlcxibilities for the Postmates on our platform. 

Our Postmatcs can work how they want, when they want, which makes it possible to match 

supply & demand during the extremely busy peak times in our business. Through this model we 

enable students to supplement their income between classes, aspiring entrepreneurs to save 

capital for new business opportunities, or parents to earn a little extra by completing deliveries 

after dropping their kids at school or soccer practice. 

All told, these sales and earnings are broadening the tax base which are being reinvested right 

back into our communities. 

II. THE CASE FOR ROBOTICS IN THE POSTMATES SUPPLY CHAIN 

So we started asking ourselves a key question. How can we expand this base of earnings, to 

continue revving our engines of economic impact in your districts? How can we do right by our 

couriers, in helping them reach even higher wages'' All the while, how can we ensure merchants 

can keep expanding the base of sales'' And how can we manage the demand logistics in 

particularly dense urban & suburban populations7 
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Congressional Testimony of Bastian Lehmann, Co-Founder & CEO of Postmates 

One such way lead us to a grand experiment with what we like to refer to as "sidewalk 

class" robotics. As pointed out in a recent piece in tbc Harvard Business Review, executives 

have to cut through a lot of hype around automation. 

Leaders need a clear-eyed way to think about how these technologies will specijica/Zv 

aflect their organizations. The righr qui?slion isn't which jobs are going to be replaced, but 

rather, what work will be redefined, and how? 

And this not need be a terrifying exercise that evokes imagery of the Tcnninator or a world 

in which an entire labor force gets displaced. So we started looking at the trend lines, to start 

with a clear-eyed assessment of our landscape. We have people who usc cars, bikes, scooters, 

motorcycles or walk to complete a delivery. And each has a different strength and suitability for 

different deliveries. 

But we also noticed that in particularly dense or crowded clusters of downtown 

neighborhoods the distance between popular delivery zones and popular restaurants or stores 

could often be quite short. Often less than a mile or two between busy downtown office-parks, 

and a popular lunch stop, for example. 

While the Postmatcs platform is ready and equipped to make that delivery, sometimes those 

short-distance stretches aren't as financially advantageous to a member of our Postmates fleet, 

when compared to longer distance dclivcrics~~~since tips and charges arc oftcu based off the 

distance traveled. 

One way to ensure the continuity of short-distance deliveries, while reserving our hard 

working Postmates for longer-distance deliveries- has been through experimenting with robots. 

Through partnerships with robotics companies on both the cast and west coast we have 

started to be able to measure qualitative and quantitative data, around how robots may be able to 

achieve delivery times when compared to current numbers. 

Most importantly we can focus our t1ect of Postmatcs to complete deliveries that are likely to 

connect them to incomes at a much higher rate. This also means that businesses -- located in 

those downtown clusters, are still able to push goods. And aren't discriminated against simply 

because them happen to be within those short-mile radiuses. 

Our thesis then, is that since both human hands, and robotic operators now on the ground, 

commerce across a given town is able to move at even higher rates, with more functional ways to 

make deliveries in a given city. Jn the long term, this could ultimately help drive down the 

overall cost of delivery, as the supply of couriers increases. 

We at Postmates do not sec a world in which robotics would be the ultimately delivery 

mechanism- instead taking these incremental and responsible steps to test automation provides 

us with 3 tangible gains: First, a quantitative assessment of whether robotics are able to achieve 

optimal delivery times. Second, a qualitative understanding of comfort levels and the overall 

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Congressional Testimony of Bastian Lehmann, Co-Founder & CEO of Postmates 

psychology our customers & business partners interacting with these robotics -- and whether that 

impacts the overall psychology of the experience in any way. And third, a firm set of data--

which for the sake of better understanding the impact of automation -- will be an important 

bedrock of insights as we weigh scaling robotics efforts within the company, or as a society. 

Ultimately, such efforts help society and technology companies explore automated 

integrations while deconstructing and then reeonfiguring the components which could reveal 

the sweet spot of human-automation combinations that arc more efficient, effective, and 

impactful. 

And while concerns may persist around the usc and integration of robotics each of our 

partner companies take steps to prioritize the safety of their key components. From perceptive, 

next-generation LiDar camera technologies to ultrasonic sensors to sec everything from pets to 

people around them,_ the robots travel at a safe speed of approximately 4 miles per hour on busy 

sidewalks, and can haul just over 40 pounds within a two-mile radius in real world scenarios. 

Moreover, sidewalk class robots don't fly overhead, minimizing the risk of collisions or payload 

damage. 

A smartphone app unlocks the shiny black lid to access the hollow, insulated holding area, 

and then automatically locks back into place. And the bot's cameras recognize a lot- including 

walk signals and traffic lights, crosswalks and stop signs, getting smarter the more they drive, 

learning more about the sidewalks and trat1ic patterns of busy streets with every trip they take. 

HI. THOUGHT LEADERSHIP: AUTOMATION'S IMPACT ON THE SOCIAL 

I•'ABRIC 

Automation is an idea that has inspired science fiction writers and fi.Jturists for more than a 

century. Today we all know that it is no longer fiction, as companies increasingly usc robots on 

production lines or algorithms to optimize their logistics, manage inventory, and carry out other 

core business functions. The process of automating tasks done by humans has been under way 

for centuries. 

What has perhaps changed is the pace and scope of what can be automated. Even 130 years 

ago, streets were not yet divided into lanes for traffic, parked cars, pedestrians and bikes, and that 

the introduction of robots to the strcctscape might require a rcimagining of the available space, 

possibly with a designated lane for robots. 

It is a prospect that raises more questions than it answers. How will automation transform the 

workplace'' What will be the implications for employment? These are the questions that this 

Committee and this country arc aiming to better understand each day. But I come here from 

Silicon Valley to deliver a simple message: The only way to determine whether there is a 

responsible, measured, and incremental way in which automated robotics can be leveraged-to 

both boost productivity, and enable a workforce to earn even more-~ is to experiment. 

In pursuit of more data, we can build a nuanced body of knowledge around how a particular 

technology could be complementary to a human function. 

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Congressional Testimony of Bastian Lehmann, Co-Founder & CEO of Postmates 

And that helps zero-in on whether it's possible to deconstruct the "future of work" into 

discrete & separate clements. And as we stand up to fight the challenges of the 21" ccntury ... and 

seek to bolster U.S. competitiveness when nations around the world arc also competing to win 

the tuturc we have a duty to experiment. 

The right level of detail at which to analyze the potential impact of automation is that of 

individual activities rather than entire occupations. According to a 2017 McKinsey report, citing 

currently demonstrated technologies, "very few occupations· ··less than 5 percent-are 

candidates for full automation. However, almost every occupation has partial automation 

potential, as a proportion of its activities could be automated. The activities most susceptible to 

automation are physical ones in highly structured and predictable environments, as well as data 

collection and processing. But it's not just low-skill, low-wage work that could be automated; 

middle-skill and high-paying, high-skill occupations, too, have a degree of automation potentiaL 

As processes arc transformed by the automation of individual activities, people will perform 

activities that complement the work that machines do, and vice versa." 

IV. INVESTING IN STEM TO WIN THE FUTURE 

But as we experiment with these transfmmation, our focus as leaders in both the public and 

private sector must be on how to invest in the training and STEM education needed to provide 

workers with the skills they need to keep up with the jobs of tomorrow. 

We look forward to a national dialogue around a smart and balanced way to regulate 

automation. And we applaud states that have been swift to pass legislation enabling us and our 

peers to operate and test within their hometowns. We even look forward to spirited dialogues 

around calls for potential tax-structures that could build a pool of capital to invest in worker 

retraining efforts. 

But all that aside one simple creed must be reflected in the nation, and the budgetary 

considerations of Congress, moving forward: 

To win the future, we must create an all-hands-on-deck approach to science, technology, 

engineering, and math. We need to make this a priority to train an army of new teachers in these 

subject areas, and to make sure that all of us as a country arc lifting these subjects for the respect 

that they deserve. And Congress, and the Administration, must work to advance a budget which 

prioritizes improving STEM teaching and supporting active learning; expanding access to 

rigorous STEM courses; addressing bias and expanding opportunities for underrepresented 

students in STEM. 

Because as automation and technology tools disrupt logistics or other sectors, we arc going to 

need to deepen the bench of talent that can guide there. To address the complex challenges 

confronting the world today we must engage all the available brainpower, creativity, and talent in 

the STEM enterprise. We cannot afford to squander the opportunity. 

That's how we ensure this disruption can keep us grounded. 

5 
15 

Mr. LATTA. Thank you very much. And Mr. Wynne, you are now 

recognized for 5 minutes for your opening statement. Thanks very 

much. 

STATEMENT OF BRIAN WYNNE 

Mr. WYNNE. Chairman Latta, Ranking Member Schakowsky, and 

members of the subcommittee, thank you very much for the opportunity to participate in today’s hearing to discuss innovative delivery systems. I am speaking on behalf of the Association for Unmanned Vehicle Systems International which represents unmanned systems in all domains. Today I will be focusing my remarks on unmanned aircraft systems, or UAS. 

From inspecting pipelines to news gathering to mapping flood 

zones, UAS help us save time, save money, and, most importantly, 

save lives. It is no wonder why thousands of businesses, small and 

large, have already embraced this technology and many more are 

considering integrating it into their future operations, including for 

delivery. 

The FAA implemented the small UAS rule, also known as Part 

107, last August. It was the result of years of collaboration between 

industry and government that established a flexible, risk-based approach to regulating UAS. These regulations have been in effect for 

more than 8 months and there is strong evidence the commercial 

UAS market is poised for significant growth. As of this month, 

there are more than 120,000 UAS registrations with the FAA, the 

vast majority of which are hobbyists; of those, 62,000 platforms 

have been registered for commercial use. The FAA expects more 

than 400,000 UAS could be flying for commercial purposes over the 

next 5 years, a more than six-fold increase from today. 

An economic analysis by AUVSI projects that the expansion of 

UAS technology will create more than 100,000 jobs and generate 

more than $82 billion to the economy in the first decade following 

full integration into the national airspace. After witnessing the 

growth of the industry over the last few years, under the right conditions we believe these numbers could go higher. 

Many of our members are exploring ways UAS can transport 

goods such as household items, medical supplies, food, maybe even 

people in the not-too-distant future. Companies such as Amazon, 

Google, and UPS are among the major players who hope to eventually launch UAS delivery services. Several companies are already 

testing the delivery capabilities of UAS both domestically and 

abroad, including at Mississippi State, sir. 

We are at the dawn of a new American renaissance in technology, one that deserves government attention and support. In the 

past, government invested heavily in physical infrastructure, from 

the nation’s air traffic control system to the Interstate Highway 

System, which ultimately had a tremendous impact on commerce. 

The benefits, however, did not stop there. Over time, the safety, security, and efficiency gains we achieved as a nation have vastly 

outweighed those costs, and the unmanned systems industry will 

be no different. 

We need a new national imperative in unmanned systems that, 

like the air traffic control system and the Interstate Highway System before it, create greater capacity, reduce road congestion, fulfill 

16 

consumer demands, and facilitate the future of commerce. Industry 

is bringing the technology; government needs to do more to support 

it and advance innovations such as delivery services. 

The vital prerequisite for advancing UAS is an appropriately 

funded FAA that can meet the IT, employment, and staffing needs 

required for the future. The FAA needs, first and foremost, to automate its UAS procedures. Automation will also be important beyond Part 107 for more complex operations such as delivery services. Many of its important management tools and processes which 

facilitate safer and more seamless UAS operations currently operate by manual data input or processing. The FAA also needs more 

employees who are dedicated to future UAS rulemakings to move 

us beyond the current regulations. 

Industry is not relying on the FAA and government alone to advance UAS. It is currently shouldering many of the R&D costs to 

spur innovation, finding solutions to make UAS fly higher and further more safely and efficiently. Industry has also been a close 

partner with government in advancing a UAS traffic management 

system known as UTM and in developing standards for remotely 

identifying operators and owners of UAS. 

The UAS industry is primed for incredible growth thanks to industry representatives and government regulators nurturing innovation that helps business be competitive in the marketplace. We 

hope that these efforts can be sustained and that we continue to 

reach new historic milestones in integrating this technology into 

the national airspace and pave the way for regular and widespread 

UAS deliveries. 

Thank you again for the opportunity. I look forward to questions 

from the panel. 

[The statement of Mr. Wynne follows:] 

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THINGS UNMANNED 

PREPARED STATEMENT OF BRIAN WYNNE 

PRESIDENT AND CEO, ASSOCIATION FOR UNMANNED VEHICLE SYSTEMS INTERNATIONAL 

U.S. House of Representatives 

Energy and Commerce Committee 

Subcommittee on Digital Commerce and Consumer Protection 

"Disrupter Series: Delivering to Consumers" 

May 23,2017 

Chairman Latta, Ranking Member Schakowski, and members of the subcommittee, thank you very much 

fort he opportunity to participate in today's hearing on unmanned aircraft systems. I'm speaking on behalf 

of the Association for Unmanned Vehicle Systems International, the world's largest non-profit 

organization devoted exclusively to advancing the unmanned systems and robotics community. AUVSI has 

been the voice of unmanned systems for more than 40 years, and currently we have more than 7,500 

members, including many small businesses that support and supply this innovative industry. 

Many of our members are exploring ways unmanned systems whether in the water, on the ground or 

in the skies can transport goods such as household items, medical supplies, and food, to even 

transporting people in the not too distant future. My comments today will focus on unmanned aircraft 

systems, or UAS, which are increasingly being used by a range of American businesses. 

From inspecting pipelines to newsgathering to mapping flood zones, UAS help save time, save money and, 

most importantly, save lives. It is no wonder why thousands of businesses- small and large- have already 

embraced this technology, and many more are considering integrating it into their future operations. 

When it comes to transporting goods, many companies have been testing the capabilities of UAS both 

domestically and abroad. Amazon, Google and UPS are among the major players who hope to eventually 

launch UAS delivery services. Industry and government have already taken several steps in the right 

direction to open the airspace to commercial UAS. Let me explain. 

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We now have initial regulations governing civil and commercial UAS operations. On August 29, 2016, the 

FAA implemented the small UAS rule, also known as Part 107. The rule was the result of years of 

collaboration between government and industry that established a flexible, risk-based approach to 

regulating UAS. This new regulatory framework helped reduce many barriers to low-risk civil and 

commercial UAS operations, allowing businesses and innovators to harness the tremendous potential of 

UAS and unlock the many economic and societal benefits the technology offers. 

The demand for commercial UAS has since exploded. As of this month, there are more than 820,000 UAS 

registrations with the FAA, the vast majority of which are hobbyists. Of those, about 62,000 platforms 

have been registered for commercial use. The FAA expects more than 400,000 UAS could be flying for 

commercial purposes over the next five years-a more than six-fold increase from today. 

Part 107 allows anyone who follows the rules to fly for commercial purposes. Generally speaking, 

operators need to fly under 400 feet, within visual line of sight and only during daylight hours. However, 

recognizing the need for the rule to be flexible in order to foster innovation, the FAA created a waiver 

process under Part 107 that allows for expanded types of operations with the approval of the agency. 

To date, the FAA has granted more than 800 waivers to Part 107. An AUVSI analysis of the first 300 found 

that companies in 44 states were already taking advantage of the process. Most of these companies are 

small businesses with fewer than 10 employees. Many companies are requesting waivers to operate at 

night, beyond light of sight and over people. High profile use of these waivers includes the most recent 

Super Bowl halftime show, which featured an aerial light show made possible by Intel's waivers to operate 

multiple UAS at night. BNSF Railway received a waiver to conduct inspections of its sprawling rail network 

beyond line of sight. 

Part 107 and its waiver process were just the first steps in creating a regulatory framework for full UAS 

integration. An economic analysis by AUVSI projects that the expansion of UAS technology will create 

more than 100,000 jobs and generate more than $82 billion to the economy in the first decade following 

full integration in to the national airspace. After witnessing the growth of the industry over the last few 

years and now with Part 107 in place, these figures will likely go higher under the right conditions and 

once we achieve full integration. 

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Specifically with regard to delivery, many companies are already testing and discovering the possibilities 

of UAS. For example: 

AA3, which is the Silicon Valley arm of Airbus, is building an aircraft that "doesn't need a runway, 

is self-piloted, and can automatically detect and avoid obstacles and other aircraft. Designed to 

carry a single passenger or cargo, they are aiming to make it the first certified passenger aircraft 

without a pilot. Their goal is to fly a full-size prototype before the end of 2017." 1 

• UPS recently tested a drone that launches from the top of a UPS package car, autonomously 

delivers a package to a home and then returns to the vehicle while the delivery driver continues 

along the route to make a separate delivery. UPS conducted the test with Workhorse Group, an 

Ohio-based battery-electric truck and drone developer. Workhorse built the drone and the 

electric UPS package car used in the test.' 

Amazon Prime Air is a delivery system designed to safely get packages to customers in 30 minutes 

or less using UAS. Prime Air has great potential to enhance the services Amazon already provides 

to millions of their customers by providing rapid parcel delivery that will also increase the overall 

safety and efficiency of the transportation system. 

These are, of course, just a handful of cases. And while we've seen most excitement around the prospects 

of UAS deliveries, unmanned systems are also transforming deliveries over water and on the ground. 

Maersk has tested ship-to-ship deliveries' in the North Sea, while just a few weeks ago in Dallas at AUVSI's 

XPONENTIAL, Intel showcased Loomo Go, an autonomous delivery robot created by Segway Robotics that 

incorporates Intel's ReaiSense camera. The robot can be operated like an actual Segway, but by using 

Rea!Sense, "Loomo is able to perceive the world around it and operate through it, doing so as part of an 

overall delivery process to bring humans objects."' 

These advancements make it clear that we are at the dawn of a new American renaissance in technology, 

1 https://vahana.aero/welcome-to-vahana-edfa689f2b75 

2

https://pressroom.ups.com/pressroom/ContentDetailsViewer.page?ConceptType=PressReleases&id=1487687844 

847-162 

3 http://www.maersk.com/en/hardware/2016/03/flown-out-by-drone 

4 http://www.geeky-gadgets.com/loomo-go-delivery-robot-15-05-2017 I 

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one that deserves government attention and support. In the past, government invested heavily in physical 

infrastructure from the nation's air traffic control system to its interstate highway system which 

ultimately had a tremendous impact on commerce. The benefits, however, did not stop there. Over time, 

the safety, security and efficiency gains we achieved as a nation have vastly outweighed the costs, and 

the unmanned systems industry will be no different. 

In the 1930s, the U.S. airline industry experienced significant growth, with the number of annual 

passengers on U.S. domestic flights more than quadrupling between 1934 and 1939. In order to enhance 

the safety of the skies and provide the necessary conditions to support the fledgling industry, the 

Department of Commerce began to operate airway traffic stations- some of the earliest air traffic control 

facilities- starting in 1936. Congressional funding supported the Department of Commerce and, by 1941, 

the federal government fully funded and operated the nation's air traffic control system. As a result of 

these early investments, today the U.S. airlines generate more than $160 billion in annual operating 

revenue, employ nearly 700,000 people and safely transport two million passengers every day. 

In the 1950s, President Eisenhower had a vision for more easily moving goods and people across the 

country. Decades earlier, he had participated in the first transcontinental Army motor convoy, which 

traveled from Washington, D.C., to San Francisco. It took 62 days. While he was the Supreme Allied 

Commander during World War II, Eisenhower saw the Autobahn system in Germany and a faster way to 

transport troops. Later when he was president, Eisenhower championed the Interstate Highway System 

and, in 1956, Congress authorized $25 billion for its construction -the largest public works project in 

American history at the time. In the decades that followed, costs fell sharply across dozens of industries 

due to easier and cheaper transportation. Today, millions of vehicles on average use this system daily.' 

Beyond physical infrastructure, government has also made significant investments in technology that has 

become ubiquitous in our daily lives, from the Global Positioning System (GPS) to the Internet. 

These examples illustrate how the government has seized on the opportunity before it to positively impact 

commerce and our daily lives. Facilitating interstate commerce is the responsibility of the federal 

government, but these investments didn't originate solely from a sense of obligation; they came from 

'https://www.fhwa.dot.gov/policyinformation/tables/02.cfm 

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necessity coupled with vision and an embrace of what's possible. Today, we stand at the dawn of another 

such moment in history. Technology is advancing at lightning speed, especially in the realm of UAS. Our 

industry stands to create enormous economic value for the country. UAS deliveries are not held back by 

innovation, imagination or technology, but by a lack of regulatory clarity. 

We need a new national imperative in unmanned systems that, like the air traffic control system, and 

interstate highway system before it, provides the resources to advance and support this growing industry. 

Industry is bringing the technology; government needs to do more to support it and advance innovations 

such as delivery services. 

A vital prerequisite for advancing UAS is an appropriately-funded FAA that can meet the employment and 

staffing needs required for the future, including the federal rulemaking processes to achieve full UAS 

integration. Equally as important, is additional federal investment to update the FAA's IT infrastructure. 

This will allow them to automate its UAS processes in collaboration with industry in order to meet the 

growing demand for UAS services and enhance the safety and security of the national airspace. 

Of course, the industry is not relying on the FAA and government alone to advance UAS. Industry is 

currently shouldering many of the research and development costs to spur innovation, finding solutions 

to make UAS fly higher and farther, more safely and efficiently. 

Industry has partnered with government to advance UAS Traffic Management (UTM) concepts, beginning 

with Low Altitude Authorization and Notification Capability (LAANC). It has also been a partner in helping 

to develop standards for remotely identifying operators and owners of UAS, building on earlier 

registration efforts with real-time tracking of UAS operators. AUVSI recently collected papers on remote 

identification solutions for UAS from industry stakeholders to help the FAA meet its congressional 

directive under the 2016 FAA reauthorization extension to develop consensus for such standards. 

Another key example of collaboration is the Drone Advisory Committee (DAC), of which I am a member. 

RTCA is the supporting organization for this Federal Advisory Committee and it "was formed to provide 

an open venue for the FAA and key decision-makers supporting the safe introduction of UAS into the 

National Airspace System. Members of the committee work in partnership with the FAA to identify and 

propose actions to the FAA on how best to facilitate the resolution of issues affecting the efficiency and 

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safety of integrating UAS into the NAS."6 Through its Drone Advisory Subcommittee and three task Groups, 

the DAC is working on providing consensus-based recommendations to the FAA on roles and 

responsibilities for federal, state and local governments. It is also working on providing recommendations 

on access to airspace and short-term FAA funding. These important collaborative measures will continue 

to be important to the growth and security of the UAS industry. 

Industry and government will continue to collaborate on outstanding issues as required to facilitate more 

complex operations, such as developing a cohesive spectrum strategy. This will require dialogue between 

industry stakeholders and all federal agencies involved in spectrum, such as the Federal Communications 

Commission, the National Telecommunications and Information Administration and NASA, and will help 

ensure that spectrum is available for UAS without inefficiencies or constraints. 

The UAS industry is primed for incredible growth, thanks to industry representatives and government 

regulators nurturing innovation that helps businesses be competitive in the marketplace. We hope that 

these efforts can be sustained and that we continue to reach new historic milestones in integrating this 

technology into the national airspace and pave the way for regular and widespread UAS deliveries. 

Thank you, again, for the opportunity to speak today. I look forward to answering any questions the 

committee might have. 

6 https://www.rtca.org/content/drone-advisory-committee 

Page 6 of 6 
23 

Mr. LATTA. Thank you very much. And Dr. Holzer, you are recognized for 5 minutes. 

STATEMENT OF HARRY HOLZER 

Mr. HOLZER. Chairman Latta, Ranking Member Schakowsky and 

committee members, thank you for inviting me today to share my 

thoughts on the new digital technologies and how they affect the 

labor market and the economy. I will tell you up front that I know 

nothing about drones, so I defer completely to my other colleagues 

at the table. But I know a little bit about labor markets and technology and that is mostly what I will focus on. 

So I would like to make five broad points today. Point number 

1, employment in trucking, courier services, and warehousing has 

actually been growing quite rapidly recently and relatively good 

jobs are being created, all of this because of growing e-commerce. 

A hundred thousand jobs were created just in the past year in 

these sectors. I believe that trend will continue for years to come 

as e-commerce spreads. Since the loss of delivery jobs associated 

with drones or even autonomous vehicles remains at least somewhat speculative in terms of its timing and magnitudes, I don’t expect the employment gains in these sectors to disappear anytime 

soon. 

Point number 2, broadly, disruptive technologies tend to raise 

our labor market productivity and therefore our living standards. 

Given how flat productivity growth has been in recent years in the 

overall economy, the development of technologies that enhance productivity should be welcomed. And I will say very clearly it is difficult if not impossible to have strong earnings growth over time for 

our workers if productivity growth remains so weak. 

Point number 3, periodically we have these panics in the U.S. 

and elsewhere over mass displacements in unemployment associated with new technologies—remember the Luddites in Britain in 

the 19th century? But maybe more relevant for us, there was a 

large automation scare in the U.S. in the late ’50s and early ’60s 

because of fear that computers would take everyone’s jobs. These 

fears are almost always overblown. 

New jobs are created when automation causes others to disappear, and workers with skills that complement the new technologies actually face a better labor market for their skills. And 

what are these complementary skills? Of course, technicians and 

engineers, but almost anyone with creative skills or social and communicative skills, those workers all do better. Of course, some 

workers are substitutes for technology, not complements; they do 

worse. 

Therefore, point number 4, many millions of workers in the U.S. 

and especially less educated men have been hurt by digital technologies in the past 4 decades in manufacturing and in other industries as well, either when they are directly displaced by these technologies or because the labor market overall has grown less hospitable to them. Those displaced by technologies often experience 

lengthy unemployment, and when they become re-employed on average they take jobs with wages 25 percent lower, and that is on 

average. 

24 

But more broadly, the real earnings of men with only high school 

diplomas or less have stagnated or even fallen over the past 4 decades, again depending on how you measure that and they have fallen behind in real terms relatively of every other major group in the 

labor force. And in response to these stagnating and declining 

wages, millions of prime-age men have left the workforce and that 

is terrible problem because their disappearance in the workforce 

hurts themselves, their families and communities, and the U.S. 

economy overall. 

Therefore, point number 5, a range of important policies should 

be adopted and strengthened to help workers. The ones hurt by the 

new technologies, help them make adjustments in this new labor 

market. We need policies to ensure that workers share in whatever 

productivity growth is generated by these new technologies over 

time. And I think of those technologies broadly as falling into three 

buckets. 

From my point of view, the most important is education and 

workforce development in addition to STEM education, other kinds 

of education in the K-12 years—critical thinking, communication 

skills, et cetera—but really helping more people get the post-secondary credentials that the labor market finds valuable. We need 

a lot more help there. 

Secondly, I think it is very important to maintain a robust system of unemployment insurance, but perhaps one with some reforms to encourage workers to build new skills and get jobs more 

rapidly and as soon as possible. I also believe it is important to talk 

more about wage insurance where displaced workers if they take 

new jobs at lower wages have part of their wage loss compensated, 

and we can talk about that. 

And finally, the third bucket, we need to ensure that workers 

share in the productivity gains generated. That includes protections for the right to collectively bargain in the private and public 

sectors as well as limits on anti-competitive practices by employers 

such as the growth of noncompete clauses in their contracts with 

worker, and happy to discuss all of this further. Thank you very 

much. 

[The statement of Mr. Holzer follows:] 

25 


26518.012

Testimony of Harry J. Holzer Before the Subcommittee on Digital Commerce and Consumer 

Protection, Committee on Energy and Commerce, US House of Representatives- May 23, 2017 

Chairman Latta, Ranking Member Schakowsky, and Committee members: 

Thank you for inviting me today to share my thoughts on how new digital technologies can affect 

employment in business delivery services, and on how new digital technologies can affect the labor 

market more broadly. 

I'd like to make the following points: 

1. Employment in trucking, courier services and warehousing has recently been growing quite 

rapidly, with relatively good jobs being created, because of growing e-commerce. Any potential 

loss of delivery jobs caused by drone technologies remains very speculative (in terms of its timing 

and magnitude) and will likely not reverse most of these employment gains. 

Employment in these services has grown by nearly 100,000 jobs over the past year, and average wages 

in these jobs generally exceed those in general retail. 1 This trend will likely continue for years to come, 

as e-commerce continues to grow. The development of drone technology to deliver products and its 

adoption by employers remain very uncertain right now and are unlikely to halt or reverse such growth 

over the next several years. 

2. More broadly, disruptive technologies tend to raise our labor market productivity and living 

standards. Given how flat productivity growth has been in recent years, the development af 

technologies by employers that will enhance productivity should be welcomed. 

As economist Jason Furman (2016) has pointed out, digital technologies that can raise our productivity 

growth should be welcomed into the workforce. Productivity has been fairly flat for over a decade (Baily 

and Bosworth, 2015), and it is very difficult to have strong real earnings growth for workers over time if 

productivity growth remains so weak.' 

3. Historically, the fears of mass displacements and unemployment that might be caused by new 

technologies in the workplace have almost always been overblown. New jobs are generally 

created when automation causes others to disappear, and workers whose skills "complement" 

the new technologies fare better in the job market afterwards {while those for whom the 

technologies are "substitutes" fare worse). 

Fears of mass worker displacement due to automation are historically associated with the Luddites in 

191

h century Britain. We have periodically had automation scares in the US as well such as in the late 

1950s and early 1960s. Fears of technologically based offshoring about a decade ago were also 

1 See Mandel (2017). Employment in trucking, courier services and warehousing rose from 2.986 million in April 

2016 to 3.080 in April2017 (Bureau of Labor Statistics, 2016 and 2017). 2 Baily and Bosworth show that annual productivity growth since 2005 has averaged only about 1.5 percent, well 

below our historical average. It is also clear that the real earnings growth of workers tends to be correlated with 

productivity growth over time. It is possible that our measurement of productivity growth is flawed, leading us to 

understate it, though it is not clear that such biases now are greater than they have been in earlier decades. 
26 


26518.013

overblown-' This is true because the magnitudes and speed of such developments are often overstated 

in advance; and also because, when implemented, a variety of market-based adjustments in jobs occur. 

Specifically, new technologies reduce the costs and prices of producing goods and services, thereby 

raising the real earnings of consumers. In turn, new spending by them creates more jobs. Workers 

whose skills enable them to "complement" technologies- such as technicians and engineers, as well as 

those with important creative or social skills- tend to find more employment and higher wages 

afterwards. In contrast, workers whose skills cause them to be "substitutes" for such technologies -like 

unskilled assembly line or clerical workers to date are often hurt. Workers and their employers have 

incentives to turn more of them into technology "complements." 

4. Still, many millions of workers- particularly less-educated men- have been hurt by 

technological change in the past four decades either because they have been directly displaced 

from good-paying jobs or the labor market more broadly has become less rewarding to them. 

Those specifically displaced by new technologies often experience a period of lengthy unemployment 

and lower wages if/when they become reemployed. 4 But, more broadly, the real earnings of men with 

high school diplomas or less have stagnated or fallen over the past four decades, and they have certainly 

fallen relative to every other major group in the labor force. Though economists disagree somewhat on 

exactly what have been the causes of these earnings declines, most believe that technological change 

has been a primary cause. And, in response to stagnating or declining wages, millions of prime-age men 

have left the workforce. This hurts themselves, their families and communities, as well as the US 

economy overall.' 

5. A range of public policies should therefore be adopted and strengthened to help to workers hurt 

by new technology make adjustments to the new labor market. And policies to ensure that 

workers share in whatever productivity growth is generated over time are essential as well. 

The most important set of policies to pursue in response to rapid technological change are in education 

and workforce development, to help workers adjust to new labor market realities. Helping workers 

attain postsecondary credentials with strong labor market value must be our top goal; giving them a 

broad skill set that will help them adjust to unanticipated labor demand shifts in the future, as a result of 

automation and other forces, is a crucial part of that process. Helping displaced workers retrain for new 

jobs (through "lifelong learning") is also critical, as are strong labor market information and services to 

help them find new jobs6 

For workers displaced by technology, a robust system of Unemployment Insurance remains critical, 

though perhaps with some reforms to encourage those out of work to build new skills and regain 

3 See, for instance, Blinder (2006). 4 Jacobson et al. (1993) show that, workers displaced from jobs who had accumulated some significant tenure (or 

seniority) on the job lose, on average, about 25% of their earnings when they become reemployed. 

'The real wages of men with high school or less education in the US have clearly fallen since 1980 (Holzer and 

Hlavac, 2012), though measures of compensation (that include the value of health insurance and other benefits) 

show stagnation rather than clear declines. But, by all measures, their earnings have declined relative to those of 

every other major demographic group. For a discussion of declining labor force activity among less-educated men 

see Doar el al. (2017). 6 See Holzer (2017). 

2 
27 


26518.014

employment soon. Wage insurance, which replaces some portion of the wages that workers lose when 

they become reemployed at new jobs, should be expanded.' 

Finally, policies that help ensure that workers share in whatever productivity gains are generated by 

new technologies are important as well. These include protections for the right to collectively bargain in 

the public or private sectors, as well as limits on anticompetitive practices by employers (such as 

"noncompete clauses" in their contracts with workers).' 

References 

Baily, Martin and Barry Bosworth. 2015. "Productivity Trends: Why is Growth So Slow?" Presentation, 

Hutchins Center, Brookings Institution, March 26. 

Blinder, Alan. 2006. "Offshoring: The Next Industrial Revolution?" Foreign Affairs. March/April Issue. 

Bureau of Labor Statistics. 2016,2017. Employment Situation Report, ApriL US Department of Labor. 

Doar, Robert; Harry Holzer and Brent Orrell. 2017. Getting Men Bock to Work. American Enterprise 

Institute, Washington DC. 

Dougherty, Co nor. 2017. "How 'Noncompete Clauses' Keep Workers Locked ln." New York Times, May 

13. 

Employment and Training Administration. 2009. "Employment and Training Guidance Letter No. 21-08." 

US Department of Labor. 

Furman, Jason. 2016. "How to Protect Workers from Job-Stealing Robots." The Atlantic, September 21. 

Holzer, Harry. 2017. Building Pathways to the Middle Class in the Knowledge Economy. Progressive 

Policy Institute. 

Holzer, Harry and Marek Hlavac. 2012. A Very Uneven Rood: US Labor Markets in the Past 30 Years. 

U$2010 Series, Russell Sage Foundation, New York. 

Jacobson, Louis; Robert Lalonde and Daniel Sullivan. 1993. "Earnings Losses of Displaced Workers." 

American Economic Review. Vol. 83, No.4. 

7 Potential reforms to the Unemployment Insurance system to encourage faster reemployment are discussed by 

Kugler (2015). The document by the Employment and Training Administration (2009) indicates reforms of 

Unemployment Insurance that make it easier for workers to also receive Pell grants for higher education and 

training while being unemployed. 

8 See Dougherty (2017) for a discussion of "noncompete clauses" and how to they potential wage growth for up to 

a fifth of US workers. 

3 
28 


26518.015

Kugler, Adriana. 2015. "Strengthening Reemployment in the Unemployment Insurance System." 

Hamilton Project, Brookings Institution, Washington DC. 

Mandel, Michael. 2017. "Update one-commerce and Brick and Mortal Retail Trade." Progressive Policy 

Institute, May 12, Washington DC. 

4 
29 

Mr. LATTA. Well, thank you very much. And Mr. Chidamber, you 

are recognized for 5 minutes for your opening statement. Thank 

you very much for being here. 

Could you—there we go. 

STATEMENT OF SHYAM CHIDAMBER 

Mr. CHIDAMBER. All right, let me begin again if I don’t mind. 

Thank you, Chairman Latta. And thank you, members of the committee, to invite me to this hearing. My name is Shyam 

Chidamber. I am a senior advisor and chief evangelist at Flirtey, 

a leading drone delivery service company. 

In my allotted time I would like to do two things: give you a very 

brief history of our remarkable company and share with you our 

perspective on drone technology and where it is going. Flirtey is a 

startup company that has its roots in Sydney, Australia. In 2013, 

we began testing textbook delivery at the University of Sydney. 

Our goal was for students to place the orders using a smart phone 

app and receive their books within minutes at their current GPS 

location anywhere on campus. 

We are now an American company headquartered in Reno, Nevada. We were chosen by Y-Combinator, the famous Silicon Valley 

business incubator; have collaborated at NASA; the University of 

Reno; Virginia Tech; The Johns Hopkins Medical Center. We have 

been funded by venture capitalists like Menlo Park Venture, 

Qualcomm Ventures, and several others. About a quarter of our 

workforce are U.S. veterans and we employ young graduates from 

engineering schools who want to change the world through innovation. 

Over the last 24 months we have achieved several major milestones in U.S. aviation history. Here are a few. In July 2015, we 

made the first FAA approved drone delivery on U.S. soil. We delivered essential medicines to patients at a free medical clinic in 

southwestern Virginia in collaboration with NASA Langley, which 

our CEO Matthew Sweeny referred to as our Kitty Hawk Moment. 

In June 2016, we conducted the first Ever Ship to Shore to Ship 

transport of medical supplies, simulating the applicability of drones 

to emergency medical situations in the aftermath of a natural disaster. Appropriately enough, this was conducted in Cape May, New 

Jersey, a few miles from the bullseye of Hurricane Sandy. 

I have a short video to play. If we can play that I think you will 

appreciate the small example. 

[Video shown.] 

Mr. CHIDAMBER. Hopefully that gives you a little idea. 

In 2016, we made the first FAA approved delivery to a suburban 

home in Reno, Nevada. Partnering with 7-Eleven, we delivered 

over-the-counter medicine, food, and drinks to wonderstruck customers. Most of all we are delighted that our historic drone delivery in Wise, Virginia, has been recognized by the Smithsonian Air 

and Space Museum with an exhibit that will be opening soon. We 

are a genuine American success story. 

Most people are no doubt familiar with the military applications 

of drone technology. But I am here to suggest to you that drones 

are a game changing commercial and civilian technology, one I beVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
30 

lieve can save lives and enhance lifestyles. Let me share two examples. 

Imagine an elderly woman who lives by herself homebound during a snowstorm. She finds to her dismay that she just ran out of 

her insulin medication. The snowstorm has raged all night, her 

driveway is not clear, and the roads are impassable. She can pull 

out her cell phone and order her insulin refill from a pharmacy and 

have it delivered by a Flirtey drone that takes off from the pharmacy, flies using GPS and hovers close to her front stoop and delivers a packet of lifesaving insulin. As Doc says in Back to the Future, ‘‘Roads? Where we are going we don’t need roads.’’ 

Think of the handyman who fixes roofs for a living. Instead of 

climbing a rickety ladder placed against a mossy gutter, he pilots 

a drone over your roof, takes vivid HD pictures that you can both 

see on an iPad. It is quick, easy, efficient, safe, and more reliable. 

You have firsthand proof of the damage of your roof, the handyman 

has to carry less hazard insurance, he can inspect more roofs, and 

earn more money. 

Mr. LATTA. Pardon me, if you could also wrap up. We are over 

about a minute on your time there. 

Mr. CHIDAMBER. Sure. 

Mr. LATTA. Thank you. 

Mr. CHIDAMBER. This future has been made possible by simultaneous advances in multiple technologies—GPS, batteries, avionics, 

materials, smart phones, 3-D printing, just to name a few. The age 

of fast, efficient, safe, low cost, last mile delivery using drones is 

at hand. There are some technical challenges in drone design, battery capacity, and safety systems that remain but these are being 

addressed. It is only a question of time before we solve them. 

So we at Flirtey ask you to imagine a future where in the event 

of a natural disaster like Hurricane Katrina, drones deliver urgent 

medical supplies, food, and water to those in need. Imagine a future where you can order anything you like online and have it reliably delivered to you within a few minutes if not a few hours. 

Imagine a future where you can order food and have it delivered 

directly to your location within minutes. That future is at hand. 

Thank you. 

[The statement of Mr. Chidamber follows:] 

31 


26518.016

Testimony before the House of Representatives Committee on Energy and 

Commerce 

Sub-Committee on Digital Commerce and Consumer Protection 

Hearing on "Disruptor Series: Delivering to Consumers" 

May 23,2017,10:15 AM 

Rayburn House Office Building, Room 2322 

Written testimony by: Shyam R. Chidambcr, Ph.D. 

Senior Advisor and Chief Evangelist, Flitiey Inc. 

Summary: 

Unmanned Aerial Vehicle or "drone" based delivery is a game-changing 

commercial and consumer technology that is rapidly becoming technologically and 

economically feasible in the United States. 

Flirtey Inc. is a leading drone delivery service that has created many firsts in the 

use of this technology in humanitarian relief operations and commercial delivery. 

The mission of the company is to "save lives and enhance lifestyles." 

Widespread adoption of drone delivery services requires speedier approvals from 

the Federal Aviation Administration (FAA) using a risk-based approach to 

granting waivers and permissions. The FAA has made a remarkable job of 

maintaining the safety of US air space, but needs to move faster to encourage air 

commerce using drones. 

With sensible regulation and co-operation between business and government 

commercial drone delivery services can create jobs, improve productivity and 

enhance consumer welfare. 
32 


26518.017

Thank you to the Sub-Committee on Digital Commerce and Consumer 

Protection to invite me to this hearing. My name is Shyam Chidamber, I 

am a Senior Advisor at Flirtey -the leading drone delivery service. Our 

mission is to save lives and change lifestyles by making delivery instant. 

In my allotted time, I would like to do two things: a) Give a brief history 

of our remarkable company and b) Share with you our perspective on 

drone technology and where it is going. 

Flirtey is a start-up company that has its roots in Sydney, Australia. In 

2013, we began testing textbook delivery at the University of Sydneyour goal was for students to place their orders using a smart phone app 

and receive it within minutes at their current GPS location on campus. 

We are now an American company headquartered in Reno, Nevada. We 

were chosen by Y -Combinator the famous Silicon Valley business 

incubator, have collaborated with NASA, the University of Reno, 

Virginia Tech and The Johns Hopkins Medical Center. We have been 

funded by venture capitalists - like Menlo Park, Qualcomm Ventures 

and several others. About a quarter of our current employees are US 

Veterans and we employ young graduates from engineering schools who 

want to change the world through innovation. Over the last 24 months 

we have achieved some major milestones in US Aviation history. Here 

are a few: 

a) In July 2015- we made the first FAA approved drone delivery on 

US soil. We delivered essential medicines to patients at a free 

medical clinic in South West Virginia in collaboration with NASA 

Langley, which CEO Matthew Sweeny referred to as our "Kitty 

Hawk Moment". 

b) In June 2016, we conducted the first ever Ship to Shore to Ship 

transport of medical samples - simulating the applicability of 

drones to emergency medical situations in the aftermath of a 

natural disaster. Appropriately this was conducted in Cape May, 

NJ a few miles from the bull eye of Hurricane Sandy. 
33 


26518.018

c) Again in 2016 we made the first FAA approved delivery to a 

suburban home in Reno, Nevada. Partnering with 7 11 we 

delivered over the counter medicine, food and drinks to 

wonderstruck customers. 

Most of all we are delighted that our historic drone delivery in Wise, 

Virginia has been recognized by the Smithsonian Air and Space 

Museum with an exhibit that will be opening soon. We ARE a genuine 

American success story. 

Most people are no doubt familiar with the military applications of drone 

technology. But I am here to suggest to you that drones are a game 

changing commercial and civilian technology one, we believe can save 

lives and enhance lifestyles. Let me share 2 examples: 

Imagine an elderly woman who lives by herself home bound during a 

snow storm. She finds to her dismay that she just ran out of her insulin 

medication. The snow storm has raged all night, her driveway is not 

clear and the roads are impassable. She can pull out her cell phone and 

order her insulin refill from a pharmacy and have it delivered by a 

Flirtey drone that takes off from the pharmacy, flies using GPS and 

hovers close to her front stoop and lowers a packet of live-saving 

insulin. As Doc says in Back to the Future "Roads? Where we are 

going, we don't need roads!" 

Think of a handy man who fixes roofs for a living. Instead of climbing a 

rickety ladder placed against a mossy gutter, he pilots a drone over your 

roof and takes vivid HD pictures that you can both see on an iPAD. Its's 

quick, easy, efficient, safe and more reliable. You have first-hand proof 

of the damage to your roof, the handy man has to carry less hazard 

insurance, can inspect more roofs and earns more money. 

This brings me to the larger point, that drones save lives, increase blue 

collar productivity, create new jobs, enhance worker and community 

safety. 
34 


26518.019

This future is being made possible by simultaneous advances in a range 

of technologies from GPS, batteries, avionics, materials, smart phones 

and 3-D printing to name just a few. The age of fast, efficient, safe, 

low cost last mile delivery using drones is at hand. There are technical 

challenges in drone design, battery capacity and safety systems that 

remain. These are being addressed and in it is only a question of time 

before we solve them. 

Simultaneously in order for the economics of delivery to scale several 

regulatory changes will be required. 

Let's take a look at the regulatory question. In the early days of aviation 

there was no FAA. Then, as a result of the 1956 Grand Canyon mid-air 

collision, in 1958 we passed the Federal Aviation Act of 1958 

(interestingly, the same year as NASA). 

Section 102 of The Federal Aviation Act of 1958 states that FAA's 

responsibility includes "The promotion of safety in air commerce". The 

FAA has done a very good job in this regard. 

However, Section 102 also states that FAA's responsibility includes the 

encouragement and development of an air-transportation system 

properly adapted to the present and future needs of the foreign and 

domestic commerce of the United States. ln other words, the "Fostering 

of Air Commerce" 

The FAA has done a great job on safety, but has not kept pace with pace 

and diffusion of drone technology. 

• One interesting quote that came from FAA just a few years ago 

was "30,000 UAVs will fill the skies in less than 20 years" 

• This reminds us of a famous quote, commonly attributed to 

Thomas Watson, "I think there is world market for maybe 5 

computers". 

• There are now more than 3 times more registered drones in the US 
35 


26518.020

than aircraft (800,000 registered drones in the US; 260,000 

registered aircraft) 

• And, over !million drones were sold last Christmas in the United 

States. Almost all of them were manufactured in China. There is a 

huge risk here that if regulations stifle the emergence of this 

industry, the market leaders will start elsewhere. If regulations 

stifled the use of routers in the 1980s, we would have no Silicon 

Valley today. If regulations stifle the emergence of drone delivery, 

we may lose our lead in drone delivery technology and the $ multibillion business that it is likely to become. 

Industry needs 3 things, and they are very simple 

• For FAA to accept risk-based approvals to do drone delivery (i) 

over populated areas (ii) beyond visual line of sight; and (iii) with 

multiple drones per pilot. 

• Industry has spent millions of dollars on the technology to build 

the above capabilities. We just need regulators to let them do it 

safely, sooner. 

There is some urgency on this matter several other countries are 

moving ahead faster than we are. The FAA has made many, substantial 

forward-thinking changes and we applaud them for it. We would like to 

work more closely with them so that we can continue to maintain the 

safety and security of US airspace while bringing the immense benefits 

of drone-based delivery services to a wide swathe of American 

consumers. 

Let me close with a story from the 1840s- Michael Faraday the father 

of electricity was giving a public lecture and demonstrating the effects 

of electric current using a magnet and a coil. After the lecture was over a 

member of the audience came up to him and asked "Mr. Faraday- what 

is the practical use of this electricity?" Michael Faraday answered "Sir, 

may I ask you what is the practical use of a new born baby?" 

We at Flirtey ask you to imagine a future where in the event of a natural 
36 


26518.021

disaster like Hurricane Katrina, drones deliver urgent medical supplies, 

food and water to those in need. Imagine a future where you can order 

anything you like online and have it reliably delivered to you within 

hours. fmagine a future where you can order food and have it delivered 

directly to your location within minutes. This future is here, if you let it 

be. 

Submitted by: 

Shyam R. Chidamber, Ph.D. 

Senior Advisor 

Flirtey Inc. 

P.O. Box 7315 

Reno, NV 89510 

~am@f1 irtey .com 

240 600 0851 
37 

Mr. LATTA. Well, thank you very much. And again, thank you to 

all of our witnesses for your testimony today. We will proceed to 

the question and answer portion of the hearing. I will begin the 

questions by recognizing myself for 5 minutes. 

And Mr. Wynne, in your testimony you touched on how commercial drones offer societal and economic benefits. Would you please 

explain the benefits and how commercial drone use provides them? 

Mr. WYNNE. Well, we are starting today under Part 107 regulations with largely vertical infrastructure inspections. That is because under the rule we have to keep drones within visual line of 

sight. That is offering tremendous safety benefits right away in industries such as cell towers, the mobile cellular industry cell tower 

inspections and wind tower inspections and so forth. People used 

to climb up on these towers. Now they don’t have to. They can execute their jobs with this technology standing on the ground. Lots 

of different public safety applications for the search and rescue is 

very large among them, et cetera. 

As we get permission to fly having demonstrated the safety of 

the technology in use in the national airspace system, as we have 

the ability to fly more complex operations, we will be able to do 

more things and create even greater value. And that is a progressive process. I think we have picked probably the most challenging 

and most complex operation of all, delivery of something in a congested airspace in an urban area, for example, but we will get 

there. 

Mr. LATTA. Let me ask you if I can follow up with you, when you 

are talking about the visual line of sight how far are you talking 

then that you are in that visual line of sight, the distance? 

Mr. WYNNE. Well, with my eyes or yours, sir? It depends on the 

size of the drone if I am not wearing my glasses. 

Mr. LATTA. Or binoculars. 

Mr. WYNNE. We have to keep the drones under 400 feet, or 400 

feet vertical of whatever it is we are inspecting either laterally or 

above the structure, so we will call it under 400 feet. 

Mr. LATTA. All right. Well, thank you very much. 

Mr. Lehmann, if I could turn to you, could you explain how your 

platform Postmates chooses to complete deliveries? And one of the 

things, or some of the questions, the technology we talked about a 

little bit earlier about being able to cross the street when it gets 

to its delivery point, if you could kind of go into that, explain how 

that all works and functions? 

Mr. LEHMANN. Yes. There we go, sorry for that. First of all, our 

humans probably do it just like we all do, so they watch the traffic 

lights. And maybe it is surprising to hear, but the sidewalk class 

robots do it in a very similar way. They are equipped with sensors, 

ultrasonic sensors, LiDAR sensors. They can be connected to the 

smart grid of a city, but by the sensors alone they are able to read 

traffic lights. They see humans walking on the street, they see 

other objects, and they behave accordingly. They travel at roughly 

4 miles an hour. 

Mr. LATTA. And how many do you have out right now that you 

are testing? 

Mr. LEHMANN. There are a few dozen that we are testing with 

on the east coast and on the west coast, and slightly more on the 

38 

west coast. We are partnering, in total, with four companies and 

we are working on our own solution in-house as well. 

Mr. LATTA. Thank you. 

Mr. Chidamber, if I can turn to you, in your testimony you mentioned about Flirtey’s FFA approved delivery of medicine to a clinic 

in Virginia. Would you explain again how the medicine delivery for 

your FAA approved drone was made? Again, was that line of sight 

or how did you get that to that delivery? 

Mr. CHIDAMBER. Yes. We did do the line of sight kind of delivery 

at Wise, Virginia. It was under controlled conditions obviously. 

There was complete line of sight during the time of travel. The 

Flirtey drone took off from Lonesome Pine Airport, which is a small 

county airport, and the medical camp was in a fairgrounds which 

is about a mile and a half away. So there is a clear line of sight 

standing on top of the roof to see the entire flight as it progressed, 

so there was somebody watching the drone the entire time. 

Mr. LATTA. And so as you said it was, you say, about a mile and 

a half that—— 

Mr. CHIDAMBER. Yes. 

Mr. LATTA. OK, and then also how high did the drone go then? 

Mr. CHIDAMBER. It is about 3-400 feet. 

Mr. LATTA. Three to four hundred feet. 

Mr. CHIDAMBER. Yes, exactly. 

Mr. LATTA. Well, thank you very much. And I will yield back the 

balance of my time and will recognize the gentlelady from Illinois, 

the ranking member of the subcommittee, for 5 minutes. 

Ms. SCHAKOWSKY. Thank you so much. As we have heard from 

our witnesses today, automated delivery has the potential to create 

new jobs for some people. For example, it is likely there will be 

more jobs for people who work in engineering and customer service, 

and new business opportunities could be created if delivery services 

become cheaper and faster and more widely accessible. 

But with automation as with other shifts in the job market there 

are winners and losers. So Dr. Holzer, you wrote in your testimony 

and you said it today that millions of workers have already been 

hurt by technological change in the past 4 decades. I wonder if you 

could expand on that a little bit. 

Mr. HOLZER. In the last 4 decades we have had two very powerful forces affecting the U.S. labor market, technology as well as 

globalization. On average, the technology has done more to substitute for less educated workers especially in old fashioned production jobs on assembly lines as well as clerical workers in offices. 

And since that is a fairly routine kind of work historically done by 

less educated workers, the machines could do that more efficiently 

in globalization as well. 

But this has been a good period for people that have post-secondary education. As I said before, anyone with communication 

skills, problem solving skills, et cetera, comes out better in this 

process. The other thing to remember is that as you suggested all 

of these technologies lower costs, therefore lower prices to consumers. They have more money to spend. They spend more sometimes in those sectors and elsewhere and new jobs get created that 

way as well. But there is no guarantee that everybody’s wages will 

go up instead of down. It is usually a mix. 

39 

Ms. SCHAKOWSKY. Let me ask you a real-world question. Will 

workers who have gone to community colleges or universities be affected differently than those who have not? Are we going to have 

to expand educational opportunities? 

Mr. HOLZER. No one knows for sure, but our best guess is that 

it will because artificial intelligence will enable these machines to 

do more and more. Not just the routine work on assembly lines, but 

work that professionals have done, everything from finance and accounting to law and medicine. 

So it will likely expand up the ladder. What happens is that we 

will need to invest more in training people in those complementary 

skills that the machines don’t do. And so in all these sectors there 

will have to be adjustments made and students will have to invest 

in different kinds of education than they did in the past. 

Ms. SCHAKOWSKY. Let me ask you about geography a little bit. 

Some experts have pointed out that the benefits of technological 

change accrue disproportionately on our country’s coasts; meanwhile, jobs in rural areas and Middle America are being lost to automation. I am wondering if you have done new research on that. 

Mr. HOLZER. I have. I would put it slightly differently. I think 

that workers in large metropolitan areas, even those internally like 

Chicago and Cincinnati, have done very well. When they have lost 

manufacturing jobs or similar, they have often gained in health 

jobs, education jobs, et cetera. I think it is more in the smaller 

metro areas and smaller towns—Allentown, Pennsylvania; Dayton, 

Ohio; places like that—that you haven’t seen the new jobs replace 

the ones that have been lost. 

So there we have two choices. Number one, we can help workers 

relocate from those locations to where the jobs are, but not everybody is going to relocate; and number two, there are things we can 

probably do to help generate more economic activity in those locations. And I think we should be thinking about some of those kinds 

of strategies. 

Ms. SCHAKOWSKY. Well, that is really where I wanted to go. How 

can we help assure that new opportunities are created by automation and that they are accessible to all workers across the country? 

Mr. HOLZER. So as I indicated in my comments I see three broad 

strategies here essentially: education, unemployment insurance/ 

wage insurance, and also making sure the workers share. When 

you are talking about these smaller towns in rural areas internally, 

jobs aren’t there at all. But even here, e-commerce for instance has 

the potential to bring more jobs to those areas, right. People can 

do coding and other kinds of e-commerce work even when the physical product and locations aren’t there, or warehouses and trucking 

if these products are going to be delivered to these smaller towns 

in rural areas at least on the short term. 

Before the drones and the autonomous vehicles there can be 

some new job creation there as well. So I think we need to think 

creatively about what kinds of jobs can be encouraged in some of 

these locations and at what kinds of wages, again while we help 

people have the mobility, some of them, to move to where the job 

growth is. 

Ms. SCHAKOWSKY. Thank you very much. I yield back. 

40 

Mr. LATTA. Thank you very much. The gentlelady yields back 

and the chair now recognizes the gentleman from Mississippi, the 

vice chairman of the subcommittee, for 5 minutes. 

Mr. HARPER. Thank you, Mr. Chairman, and thanks to each of 

you being here today on this very important and interesting topic. 

And Mr. Wynne, it is good to have you back. The last time that 

you testified during the subcommittee’s hearing on the evolving use 

of drones, we talked about the UAS Center of Excellence, its research, and FAA’s road map for integrating UAS in the national 

airspace system. Following up on that discussion, what areas of research do you believe that the ASSURE program should be focusing on to more rapidly implement routine UAS package delivery 

system? 

Mr. WYNNE. The ASSURE program is very broad in its scope 

doing a lot of different work that is really important to get to more 

complex operations. I think that one of the biggest challenges we 

need to solve is detect and avoid technologies. Pilots today, myself 

included, if we are not in the clouds, it is our responsibility to see 

and avoid other aircraft. That is harder to do when you are not on 

the aircraft. 

So we are developing technologies for see and avoid, well clear 

standards, et cetera, et cetera, all of that work is being led by the 

Center of Excellence. It is being distributed through some of the 

best minds in the country and a lot of collaboration going on. So 

I would choose that as probably one of the seminal technologies 

that is being developed today. 

Mr. HARPER. OK. And obviously those that are flying private aircraft, commercial, they have to know that something is in that 

space, and then I guess the drones themselves need to be able to 

realize that they are both in the same zone; is that what you are 

referring to? 

Mr. WYNNE. That is exactly right, sir. We are talking about 

smalls, today under 55 pounds, small UAS. Ultimately, there will 

be aircraft of all sizes and there are aircraft of all sizes already 

that fly in all areas of the airspace. So, there are different kinds 

of rules above 18,000 feet in Class A airspace than we would need 

below 400 feet where there is very little traffic. 

But the drones themselves need to be able to automatically adjust to one another and they need to be able to adjust to anything 

not performing in the system, or not participating in the system 

such as an EMS helicopter or potentially an air applicator for agricultural purposes. 

Mr. HARPER. We certainly know that the drone delivery business 

idea is not just limited to the United States and we have been advised that the ASSURE program has been contacted by other countries asking for information on its research. How important is regulatory, cross-border harmonization to the drone delivery business? 

Mr. WYNNE. It is very important. The UTM system, unmanned 

aircraft system traffic management that ultimately we are developing and I think the United States has, through NASA and the 

FAA, has been leading on, ICAO, the International Civil Aviation 

authority or organization in Montreal, recently launched an initiative with NASA. They recognize many member states. The ICAO 

recognized that they don’t want to do this all themselves. So I 

41 

think U.S. leadership is going to be critical in getting this done, but 

clearly there will be contributions from all over the world. This is 

a global phenomenon, this technology, but I think we are now in 

a place where we can lead. 

Mr. HARPER. Mr. Chidamber, do you see differences between how 

the United States treats commercial drone delivery and how drone 

deliveries are treated in other countries, and with that is the U.S. 

ahead or behind other countries in the drone marketplace? 

Mr. CHIDAMBER. On the regulation side, I think the FAA has 

been slower than their equivalent authorities in other parts of the 

world. I am thinking particularly of New Zealand where we actually deliver Domino’s Pizza in New Zealand, in Auckland, actually. 

Approvals came faster. It was based on risk assessment. Not just 

the aircraft, but who is running the aircraft, what controls are 

there and so on. 

So a risk-based analysis of approvals is probably what we would 

require and I think the FAA is heading in that direction. We would 

like to see them go faster towards that goal and I think we will 

get there. 

Mr. HARPER. And you think the risk assessment is key to this? 

Mr. CHIDAMBER. Absolutely, yes. I think the threat from perhaps 

a hobbyist is greater than a legitimate operator who is running a 

business and making deliveries for medicine or pizza or whatever 

it might be. That person is going to be carrying insurance, it is 

their brand. They have got to protect all of that. 

So a legitimate business which is operating under the confines of 

the rules of the land are going to be quite cognizant of all of these 

things and safety is a big issue for them. 

Mr. HARPER. Thank you very much. My time has expired. I yield 

back. 

Mr. LATTA. The gentleman yields back. The chair now recognizes 

the gentleman from Texas for 5 minutes. 

Mr. GREEN. Thank you, Mr. Chairman. I didn’t know I was coming up that quick. I want to thank both Chairman Latta and Ranking Member Schakowsky for having this hearing today. 

Ensuring the safety of our constituents has and will continue to 

be our top priority. Although automation technology has potential 

for massive benefits to society including the disabled and elderly, 

like all groundbreaking technology there are risks to some parts of 

society that need to be considered and I look forward to talking 

about this with our experts. 

Automated delivery of goods has been talked about as a way to 

help mitigate the last mile problem, the inefficiency of carrier 

trucks delivering goods short distances and individual consumers. 

However, in cities like I represent in Houston, part of which I represent, distance frequently can be quite long. My first question I 

would like to ask the panel, do you see this affecting the use of 

automated delivery technology and if so, how? Any response? No? 

Mr. LEHMANN. I can take it. From Postmates’ perspective we believe that the short range deliveries are what we can conquer first 

and where we can experiment first with our delivery robots. They 

are predominantly designed for sidewalks. 

Mr. GREEN. OK. Dr. Holzer, in your testimony you talk about 

how disruptive technology has the potential to affect the labor marVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
42 

ket, especially the trucking and delivery courier industry. I would 

like to ask the whole panel their thoughts about what industries 

would be disrupted by this technology and where they see new 

labor trends developing as a result. 

And let me just say, in the Houston area I have watched in the 

last 4 years Amazon come in and build a huge warehouse near our 

intercontinental airport because of air transport, but they still have 

to get those packages out. And how would that disrupt these labor 

trends? It seems like it would just expand it unless they send out 

those drones from their warehouse, using Amazon as an example. 

Mr. LEHMANN. I think there are two trends that are important 

to distinguish here. On the one side you have clearly a company 

like Amazon that gets more sophisticated with their delivery infrastructure and they want to optimize for their hub and spoke model 

that works very well for them, centralized warehouses, fast delivery from these warehouses into metropolitan areas. 

But I believe it is important to recognize and I would like the 

panel to recognize that there are companies out there that specifically work on providing local retailers with technologies to compete 

with these sorts of infrastructure. Postmates for example allows 

local retailers to offer Amazon-like services and deliveries right 

from their retail stores. 

So we are envisioning a role that is a lot more decentralized 

where you have a thriving local community. It is a different approach than that of Amazon, but we believe in thriving local economies and we believe in a healthy local economy in communities. 

Mr. CHIDAMBER. May I add to that? 

Mr. GREEN. Yes. 

Mr. CHIDAMBER. I completely agree with that statement, because 

a small business area with a drone delivery capability can compete 

more effectively with the large chains. So there is a whole competitiveness issue here that new technology brings to small players in 

the market. 

The second point I want to make is about productivity, which I 

think the good professor on my right hand side said that earlier. 

Drones particularly can increase blue collar productivity and a roofer, a delivery person can make more deliveries per day doing those 

sorts of things. Their pay will go up. It is the productivity problem 

that these things will address and that is the important thing to 

remember. 

Mr. GREEN. OK. Thank you, Mr. Chairman. I will yield back. 

Mr. LATTA. Thank you very much. The gentleman yields back 

and the chair now recognizes the gentleman from New Jersey for 

5 minutes. 

Mr. LANCE. Thank you very much, Mr. Chairman, and good 

morning to the distinguished panel. 

Mr. Lehmann, you state in your testimony with more than 

65,000 active Postmates across 44 metropolitan markets covering 

300 U.S. cities, our platform facilitates more than two million deliveries per month. Does that mean you are currently in major cities 

or are you in rural areas as well? 

Mr. LEHMANN. Both. We are in major metropolitan areas. We 

would consider Los Angeles a major metropolitan area and then we 

have suburbs that we cover as well. We are in the OC, yes. 

43 

Mr. LANCE. Are you located throughout New Jersey, the state I 

represent in Congress? 

Mr. LEHMANN. We are, yes. 

Mr. LANCE. Thank you. 

To Flirtey, I am interested in your testimony. I was very interested to hear that you conducted the first ever Shore to Ship to 

Shore transport in New Jersey, and I appreciate your highlighting 

the significance of the location considering what occurred in 2012 

regarding Superstorm Sandy, a devastating event for the region of 

the country, part of which I represent. 

Many lost electricity for between 1 and 2 weeks. Many of the 

roads were impassable with fallen trees, power lines, and debris. 

Had this technology been available then, how do you think it would 

have helped to mitigate the prolonged hardships many in New Jersey and in New York and Connecticut faced? 

Mr. CHIDAMBER. Thank you for that question. I think it would 

have been invaluable if you had drones by the shore which could, 

the roads were impassable, as you remember, to get to the spot, 

but there were first responders who were already there. And if 

there were people who required medical assistance and they required medication of some sort, it would be tough for them to get 

that medication bussed in or trucked in from somewhere. Similarly, 

even simple things like potassium permanganate to just keep the 

water clean or anything like that, those things could have been 

brought from a boat alongside, the waterway and a drone could 

have shipped it over. 

So a number of things like that would have been possible, so absolutely. I think drones would have been very, very helpful if you 

had it deployed against Sandy, and I am so sorry that we were not 

able to do it. 

Mr. LANCE. Thank you. Let’s hope that this type of natural disaster does not occur again, but obviously natural disasters will 

occur and we are always interested in advanced technology. 

Mr. Lehmann, in your testimony you mentioned sidewalk class 

robotics. Can you please explain to me at least what you mean by 

that? 

Mr. LEHMANN. Literally it is I would say everything under the 

size of a refrigerator robot that is driving itself on the sidewalks 

and streets of a city. 

Mr. LANCE. Thank you. This is a fascinating topic and I am sure 

that as we progress the work of the distinguished members of the 

panel will lead to greater protection and greater service for the 

American people. I yield back the balance of my time. 

Mr. LATTA. Thank you. The gentleman yields back and the chair 

now recognizes for 5 minutes the gentleman from Vermont. 

Mr. WELCH. Thank you, Mr. Chairman. I thank the panel. I want 

to ask your thoughts about privacy concerns. With all these drones 

flying around they have a mission to do, maybe a deliver a package, but they are also capable obviously of collecting data. They are 

also capable of taking photographs. They are also capable of doing 

things that some people may regard as an invasion of their personal privacy. 

Mr. Wynne, is that at all a concern in your organization? 

44 

Mr. WYNNE. Of course, sir. Everyone is in favor of privacy. The 

organization that I represent worked very, very hard in the NTIA 

process for civil liberties groups under the initiative from President 

Obama to discuss privacy to come up with guidelines. Those guidelines are in effect for the industry. 

I would say that in terms of delivery, the amount of data that 

is required just to conduct that operation is probably already, I 

would say creating opportunities for large chip manufacturers to 

try and figure out how to process that data. And so collecting additional data that is not related to the mission is probably less of a 

concern, but all of the companies involved are sensitive to the fact 

that they need to be focused on whatever it is that they are doing. 

Mr. WELCH. So tell me, what do you think should be the heart 

of guidelines to protect privacy? And this would be from companies 

that are utilizing drones to be more productive, but also private individuals using drones. 

Mr. WYNNE. Well, I think it pertains to the way we collect data 

in general, and I use, in that process there were many ubiquitous 

technologies that we are already looking at such as facial readers, 

license plate readers, facial recognition technology, et cetera, where 

the question is what are you doing with that data; how is that data 

stored for what length of time, et cetera, et cetera; how is it protected, so all of those questions pertain. 

As it relates to individual use of drones, clearly that is, I think 

we are focusing on trying to educate people about safe and responsible flight. Responsible flight means you are not annoying people, 

you are not doing things that are already against the law, or utilizing this technology to break the law that pertain to the use of 

any other data collection. 

Mr. WELCH. OK. Mr. Lehmann, how about you? Do you see privacy as a legitimate concern among the public as to needing some 

regulation and guidelines that are required of folks using drones 

for otherwise legitimate purposes? 

Mr. LEHMANN. Thank you for the question, Representative 

Welch. We do not use drones currently, but on the platform, on the 

Postmates platform itself, we obviously take data privacy very seriously. I can give you an example. The entire communication between you and the Postmate who would do the delivery on his behalf is anonymous. The data, even the phone numbers and the addresses of the addressee, for example, are disguised so that no 

party can see the other party’s private information. 

Mr. WELCH. OK. Dr. Holzer, or Mr. Holzer? 

Mr. HOLZER. I am sorry, what question? 

Mr. WELCH. Well, your thoughts on privacy. That is a concern 

that a lot of people contact a lot of us about. People like the opportunities that drones can provide, but it also can be an invasion of 

privacy if done improperly. 

Mr. HOLZER. In all honesty I haven’t thought a lot about the privacy implications so I will pass on that and defer to my colleagues. 

Mr. WELCH. OK. 

Mr. CHIDAMBER. Privacy is a legitimate concern. Most people 

don’t want their privacy invaded. Drones and particularly companies like ours which have drone delivery services recognize that 

completely and regard the information, we keep it only for the purVerDate Nov 24 2008 11:18 Oct 16, 2018 Jkt 037690 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-35 CHRIS
45 

poses of flight planning and those sorts of things and it is completely encrypted. It is just another set of files on a computer which 

are protected by encryption algorithms and the usual things that 

go with it. 

Mr. WELCH. OK, thank you very much. I yield back. 

Mr. LATTA. The gentleman yields back and the chair now recognizes the gentleman from Kentucky for 5 minutes. 

Mr. GUTHRIE. Thank you. Thank you, Mr. Chairman, and I 

thank the witnesses for being here. 

There is a recently joined with Congressman Aguilar to form a 

commercial e-commerce committee or caucus, and our districts are 

centers for e-commerce. With UPS World Port next to my district, 

a lot of people in my district are involved in e-commerce. Amazon 

is a big player in Kentucky as well, among others, so there is lots 

going on and it is exciting times. 

Mr. Wynne, when we talk about package delivery with unmanned vehicle systems, what areas of the country or where particularly are these being really tested or do you see them working? 

And there are actually some of them in progress right now and 

working. Where do you see most of the commercial testing being 

done and why do you think that is? 

Mr. WYNNE. Well, of course there are the test centers that are 

around the country. I think, really, there are six test centers where 

some of that is being done. There is a lot of beyond visual line of 

sight being done in some of the test centers because they are specifically set up to not only conduct those missions, but also to collect the data that we need in order to demonstrate that this can 

be done safely and effectively. 

I think where the initial deliveries will probably occur will be in 

less risky airspace, less congested airspace. There are some delivery companies already that are doing last mile types of operations 

out in rural areas that save a little bit of wear and tear on their 

trucks. So it is not just from a warehouse to a delivery site, it 

might be from a truck to a delivery site as well. 

And again in those instances we might be out in very 

uncongested airspace where again we are able to learn in that environment and then ultimately bring the data that we have collected to the FAA and demonstrate this can be done in more complex airspace. 

Mr. GUTHRIE. That is interesting, because you do think of it 

being urban or suburban, but you could take it to parts of my district that have a town or a city and deliver out from there to—you 

are right. There are a lot of miles traveled to get to certain areas 

of my district that are less populated. I appreciate that. 

So Mr. Lehmann, when we think about delivery service do we 

think of food or product, or we talked about pharmaceuticals. You 

indicate in your testimony that your platform offers much more 

than that. Can you explain how your platform has helped everyone 

from teachers to the elderly? 

Mr. LEHMANN. Thank you. It does that on both sides of the platform. I will give you an example. We are delivering each month 

from roughly 60,000 local merchants throughout the United States. 

Around 70 percent of the platform is prepared food, but you will 

find 30 percent of the two million deliveries across a wide range 

46 

of retail categories—supermarkets, hardware stores, electronics, so 

customers really use the Postmates app for a wide range of access 

to goods. 

On the other hand, you have a very vibrant fleet of Postmates. 

Everyone from an artist—you can be a Postmates in a couple of 

minutes. If you had a postmates.com/fleet, you can sign up. As long 

as you pass the background check you are good to go. And that is 

how we enable additional income in this country. 

Mr. GUTHRIE. Well, thank you very much. 

And Dr. Holzer, my other role in Congress I am the chairman of 

the Subcommittee on Higher Ed and Workforce, and it is so interesting some of the things you are talking about. What you see over 

time is that automation has replaced routine work, but now when 

I visit companies and move forth they are using automation because they can’t find work. So self-ordering at a restaurant—you 

just see it all the time—unmanned, a lot of trucking companies are 

interested in unmanned vehicles because they can’t find truck drivers. 

And in areas that, maybe in restaurants it is lower income, but 

I know in one area where I am starts in the mid-40s and it is not 

like you have to go to school 2 years to get a degree. It is a 4- or 

5-week truck driving school. So you said the policies need to be 

adopted on trainings there and that is what we focus on. 

What kind of things do we need to get the market working where 

we have jobs that actually pay pretty well, but we can’t get people 

to get to the retraining to get into the workforce? It is a big question, I know, in 48 seconds. 

Mr. HOLZER. OK. I think we need to make our higher ed institutions, and here community colleges are very important, make them 

more responsive to the labor market. As you know, right now many 

community colleges, the public institutions, if they get the same 

subsidy from the state no matter what, they don’t really have to 

worry about the labor market very much. 

A lot of states are moving toward making that money more conditional on outcomes. I would like to make them more conditional 

on employment outcomes of the students there, along with some 

extra resources to make sure that these institutions for instance 

can cover the equipment costs, which are very high, and all the 

support services you need like the career counseling, labor market 

information, to sort of reduce the gap between those institutions 

and the jobs. 

Of course the other important strategy here is work-based learning like apprenticeship, and I think we can do a lot more to encourage, to help and assist and financially incentivize more employers 

to create apprenticeships and other modes of work-based learning 

for workers. But this way you are bringing the labor market and 

the education closer together. 

Mr. GUTHRIE. OK, thank you. My time has expired. I would love 

to go further, but my time has expired. 

Mr. LATTA. Well, thank you very much. The gentleman’s time 

has expired and the chair now recognizes the gentleman from California for 5 minutes. 

47 

Mr. CA ́ RDENAS. OK. Thank you for not taking some of my time 

away since Mr. Guthrie went over on his time. Thank you, Mr. 

Chairman. 

My first question is for Mr. Wynne. In your prepared statement 

you cite an economic analysis by AUVSI that projects that the expansion of UAS technology will create more than a hundred thousand jobs—it is good to hear—and generate more than $82 billion 

to the economy. Again, good news. Could you describe some of the 

types of jobs that might be created? 

Mr. WYNNE. Well, let’s start with the remote pilots. We have certificated 40,000 of those since August of last year. That is probably 

double the number of manned pilots that we have certificated 

under Part 61, so we have a lot of people coming to the workforce. 

Some of them are 4,000-hour pilots from the military. Some of 

them are people that are straight out of community college that are 

getting their training through community colleges. So they are out 

there now flying under Part 107. That is very, very good news. 

The design elements of the solutions that are coming to market 

through the air side alone, although we represent all things unmanned, are just many, many of the different technologies that my 

colleague from Flirtey mentioned are converging here in a very, 

very explosive way, a very positively explosively way. So there is 

engineering of course, but there is an entire market that developed 

in a cell phone arena that is worth $4 billion now for cell phone 

repair. 

Imagine that you know with millions of drones what kind of a 

market we are going to create for drone repair, for example, for 

more expansive platforms. So there are many, many different jobs 

out there that will essentially enable this technology solution going 

forward. 

Mr. CA ́ RDENAS. Thank you. And when it comes to the pilots, how 

long is the training roughly? What kind of training required for 

them to be licensed to do this job? 

Mr. WYNNE. The only requirement for flying Part 107 today is a 

knowledge-based test that is administered by the FAA. As a Part 

61 pilot and existing pilot, there is a slightly different route that 

also involved demonstrating a certain amount of knowledge. 

What is happening in the marketplace is that groups that are 

standing up their own training programs to give pilots stick and 

rudder experience. Some of that is being done in our test centers, 

for example. Some of our organizations that want to fly over people 

recognize that there is additional risk associated with that. 

It can be done under waiver, in Part 107 under a waiver, but 

they need to bring people to the table who know what to do in certain circumstances where there is additional risk and how to mitigate that risk, so those training programs are actually being developed based on the operations that are required. 

And in some instances, I will take a utility company. That utility 

company might want to see additional training before they are 

going to let someone fly near and do inspections of one of their substations, for example. So we are in the process in AUVSI of getting 

those remote pilots together and looking at how do we develop that 

process of training pilots. 

48 

Mr. CA ́ RDENAS. OK, thank you. Well, this next question goes to 

all of you, whoever would like to answer it. Many national infrastructure and transportation technology achievements have been 

made possible in the past by a government investment, for example, Congress’s $25 billion authorization to construct an Interstate 

Highway System. 

So what is the role of government investment in the advancement of automated technology, any kind of partnership going on? 

Our university grants, I mean can we take credit for something? 

Mr. HOLZER. I will only talk about the employment side. 

Mr. CA ́ RDENAS. OK. 

Mr. HOLZER. And all of the jobs that you mentioned will require 

some new training and the jobs created actually are much broader. 

And Mr. Wynne talked about the jobs directly associated with this 

technology, but as prices and costs come down the entire retail sector could expand. And as I said, consumers will have more income 

to spend so they can spend that economy wide. 

So the whole range of jobs will require skilled workers and public 

investments. We have got to make sure those public investments 

are efficient and done well, but there is already a large public role 

in higher education and workforce development, and I think it was 

very important that that role continue as we make those services 

more effective as well. 

Mr. WYNNE. And I will specifically say UTM is extremely important, unmanned aircraft system, traffic management system. That 

is going to require, it is going to require R&D. That R&D is largely 

being done, initiated inside of NASA. It is now being done in conjunction with the FAA and in collaboration with industry. 

But that requires some investment on the part of the government. And it is much like when we established the air traffic control system in the mid-’30s and late ’30s, it is going to require some 

leaning in by the government. 

Mr. CHIDAMBER. If I may, and I have two examples. Flirtey was 

given space in the engineering lab at the University of Reno when 

we couldn’t afford rent and that was possible because the people 

in the university and the people in the government made that possible. And now we recruit people from a graduate program and an 

undergraduate program in drone engineering from that very school, 

so we have repaid it many times over already. 

Similar situation in Virginia Tech, without Virginia Tech we 

could not have done the first drone delivery in Wise County in Virginia 2 years ago, and that is because Virginia Tech supported us, 

helped us; helped us in testing. It was part of the UAV test facilities that had been set up by the FAA and because of all of that 

we were able to do what we did and grown from there. 

Mr. CA ́ RDENAS. Thank you, Mr. Chairman. 

Mr. LATTA. Thank you very much. The gentleman’s time has expired. The chair now recognizes the gentleman from West Virginia 

for 5 minutes. 

Mr. MCKINLEY. Thank you, Mr. Chairman, and thank you again 

for another very interesting panel and discussion. You are never 

short of vision on where you want to take this. 

I am intrigued with it because I get, Mr. Lehmann, I can remember 60 years ago we used to have couriers deliver groceries in our 

49 

small community, so it is not something new. It is just you are apparently doing it in a more proficient way. It didn’t last very long, 

but it was an interesting concept to have groceries delivered 60 

years ago. 

But I want to focus more on the consumer protection part of this. 

I am curious from the panel what regulations or rules are out there 

now to control what can be delivered using a drone or a courier for 

that matter? Because I am interested in liability with it and also 

for consumer protection because we have got a drug problem in this 

country that is pretty severe. Not pretty severe, it is severe. 

Are you able now, under your rules are you able to deliver products from one household to another using a courier or using a 

drone? Is there a rule on that? 

Mr. LEHMANN. On the Postmates platform currently that is not 

possible. The use of the couriers is tied to a purchase in a retail 

store that we enable on our platform. But just as a broader question, I believe that there are many better ways to disguise the delivery of drugs, for example, than to do it on platforms that use a 

lot of technology where it is difficult to disguise the identities of everyone involved. 

Mr. MCKINLEY. But if this is the advent of what we are going 

to see more of, do we have a role here for government on consumer 

protection to develop some standards or things that you cannot 

whether it is drugs, shipping across state lines that maybe would 

be inappropriate, weapons that could be shipped from it could be 

a retail store to a home and not being under control; is that possible now that that could happen that you could ship a weapon? 

Mr. LEHMANN. Not on the Postmates platform, our terms in services wouldn’t allow that. But we operate under the federal and the 

state laws of each of the states, municipals, and communities that 

we are operating in. 

Mr. MCKINLEY. Are there any standards by which you ship or is 

that just something you all set? Are there standards set by the government about what can be shipped by courier or by a drone? Are 

there any standards out there by the government? 

Mr. CHIDAMBER. I do not believe there are any special, I don’t 

think there are any special new guidelines that have been issued 

by the government, but I think the rules that apply to all couriers, 

all other transportation mechanisms like FedEx or UPS, all those 

things still apply. 

Mr. MCKINLEY. Let me find out more about that because I am 

curious about that. I think the concept is very interesting. It has 

been around for a long time, but with the advent of some of the 

other activities that have been going on, the bad actors out there, 

I am just concerned about it. 

Now from also a standpoint of intrusion, would drones into a 

community maybe per acre perhaps, is having access to five drones 

in an acre that is acceptable? Is that something or is it 20 drones 

per acre that come in? Where does it stop and where do we intrude 

on people’s privacy of sound, because these things aren’t necessarily quiet. So if we reach that point that we have this proliferation, are we starting to have a problem for people and their privacy 

in their residential area? 

Mr. CHIDAMBER. Would you like to take that first? 

50 

Mr. MCKINLEY. What is the appropriate level of drone activity in 

a community? Is it 10 per acre, 1 per acre? 

Mr. WYNNE. I think you are raising a very interesting question, 

sir. I don’t have an answer to that question because we are nowhere near that level of adoption and I think it is appropriate that 

we think about that. I will tell you this, that you know as the driver of an electric vehicle that makes zero noise, which I thought was 

good for my neighborhood, there are people in the neighborhood 

who are concerned about me running over their children because 

they won’t hear it coming. I haven’t done that yet. I am not aware 

of that ever happening with an electric vehicle. 

And I can tell you that you know the noise that a drone makes 

is largely a function of what the quality of its propellers. So I look 

at this from the standpoint of I represent an industry that is dedicated to getting this technology into the mainstream and creating 

value for society as well as economic business, economic opportunity for that society, so I think you know that can’t be done without it being done sustainably. We have to consider the kinds of 

questions that you are raising and I think it is very appropriate 

that we do that. 

Mr. MCKINLEY. Well, thank you very much. I yield back. 

Mr. LATTA. Thank you. The gentleman yields back and the chair 

now recognizes the gentleman from Florida for 5 minutes. 

Mr. BILIRAKIS. Thank you. Thank you, Mr. Chairman. I appreciate it. 

Mr. Chidamber, in your testimony you mentioned the two-prong 

mission of the FAA to promote safety in air commerce and also to 

foster air commerce in the United States. So do you believe the 

FAA is fulfilling its full mission? 

Mr. CHIDAMBER. I believe the FAA is doing remarkably well in 

its safety mission, for sure. We have the safest, most crowded airspace in the world, no question about that. Thanks to the FAA they 

are making sure it is the safest place on the planet to fly aircraft. 

On the part of air commerce, I think that has not been of equal 

emphasis at this point. Certainly with respect to unmanned air vehicles they are making clear steps in that direction. 

Mr. BILIRAKIS. What do they need to be doing, in your opinion? 

Mr. CHIDAMBER. There are three basic areas where we would like 

to see speedier approvals for trials and for eventual dissemination 

of this sort of technology. We need to be able to fly beyond visual 

line of sight. We need to be able to fly over people. And we need 

to be able to have one operator control multiple drones. Right now 

those three things are not in the cards yet. 

So gradually we have to get there in terms of allowing for experimentation, proving, data gathering, and then eventual release of 

those things as a standard operating procedure. So those things 

need to happen. 

Mr. BILIRAKIS. OK. You also mention in your testimony that in 

June of 2016, Flirtey highlighted other benefits of its commercial 

delivery system with the delivery of medical supplies. Can you discuss the extent of the demonstration like how many deliveries in 

how many hours, the maximum weight they can handle, et cetera? 

If you can elaborate on that I would appreciate it very much. It is 

very interesting, yes. 

51 

Mr. CHIDAMBER. Sure. You are referring to the one in Cape May, 

New Jersey, I take it? 

Mr. BILIRAKIS. Yes, yes, yes. 

Mr. CHIDAMBER. What was happening was there was a boat off 

on the water and from there a drone took off and landed on land. 

There was a doctor who was collecting biological samples, so the 

weight of it was not that much. We can carry up to about 7 or 8 

pounds in terms of payload, so it was well underneath that. 

So the drone that takes off, goes back to the boat where—it was 

a simulation, mind you. So presumably on the other side tests can 

be performed, let’s say, is somebody affected with malaria and 

things of that nature and you could then ship back medication 

which the doctor could then administer to the patient and people 

like that. That was the simulation that was done. 

There are a few things here that were significant. Dr. Amukele 

from Johns Hopkins, who conducted the medical practice of it, he 

is interested in looking at blood samples and what happens to 

blood samples if you ferry them by drone. Do they spoil, do they 

change, is it affected? And we have been doing tests on all of these 

sorts of things and we are happy to report that a lot of medical 

samples can indeed be delivered using drone without any detriment 

to their medical condition. 

Mr. BILIRAKIS. Well, that is good news. What other ways in examples could this benefit the public when natural disasters or terrorist attacks may happen? Give me some other examples how this 

would benefit the public. 

Mr. CHIDAMBER. Food, medicine, water, cell phones, any number 

of things of that sort. The heartrending scenes that we saw from 

Katrina when there were signs being painted on top of roofs saying 

I need medicine, I don’t have it and there is water everywhere, nobody can get to that person. That sort of stuff can be avoided. 

Whatever that person needs, if they are in contact with someone 

a drone can bring it over to them exactly where they are which is 

remarkable. I think we could have saved lives in Hurricane 

Katrina for sure if you had drones deployed there. 

Mr. BILIRAKIS. And you said they could carry up to 7 to 8 pounds; 

is that right? 

Mr. CHIDAMBER. Yes, and the payloads are increasing every day 

as the technology gets better. 

Mr. BILIRAKIS. OK, so fascinating, thank you very much. Well, 

let’s see, I have 22 seconds, quickly, Mr. Chairman. Mr. Wynne, 

can you please provide us with some example of what the companies are doing as far as testing with regard to the delivery, please? 

Mr. WYNNE. I mentioned that some of the delivery companies are 

already doing deliveries from their trucks in rural areas, so that is 

already happening. There are places in Africa where medical supplies have been delivered. I don’t remember if it was Flirtey or not. 

Mr. CHIDAMBER. No, it wasn’t. 

Mr. WYNNE. But a number of companies—— 

Mr. CHIDAMBER. It was a competitor. 

Mr. WYNNE [continuing]. Have been doing that. I beg your pardon. 

[Laughter.] 

Mr. CHIDAMBER. A nameless competitor. 

52 

Mr. WYNNE. I am in the unenviable position of being able to root 

for everyone to win. 

Mr. BILIRAKIS. It is always good to have competition to bring the 

prices down. 

Mr. WYNNE. Yes, and I think right now those are the most obvious. Probably the one that captures my attention is that we have 

Global Hawk, which is a fairly sizeable platform that does early detection of hurricanes off the east coast of Africa, 36-hour endurance 

that literally flies out of Wallops and for NOAA. So that is beyond 

visual line of sight and that is the kind of work that can be done 

that quite literally, the Jim Cantores of the world are really excited 

about. 

Mr. BILIRAKIS. Very good. Thank you, Mr. Chairman. This is a 

great hearing, I appreciate it. I yield back. 

Mr. LATTA. The gentleman’s time has expired and he yields back. 

The chair now recognizes the gentleman from Pennsylvania for 5 

minutes. 

Mr. COSTELLO. Thank you, Mr. Chairman. 

Last session in Congress I had the distinction of serving on the 

Transportation Committee, specifically the Aviation Subcommittee, 

and paid close attention to the FAA regulations as well as what I 

would say is a bit of a hands-off approach to UAVs. And it has 

been very interesting to see just how rapidly this sector of the economy has embraced UAVs as a delivery system and I think very 

clearly that is going to continue. It obviously raises questions related to jurisdiction and what kind of regulatory framework we 

need, how much more intense it might need to be or how light it 

should remain. So my questions relate to the waivers granted by 

FAA for commercial use of unmanned systems. 

Mr. Wynne, I would ask you, related to the waiting line for waivers, do you think it is still too long? Obviously you would like to 

get same-day approval, but share with me your experience there as 

well as how we might be able to streamline authorizations, develop 

best practices—which I think is emerging—and ensure that the 

FAA’s designated test sites are used effectively. 

Mr. WYNNE. We recently launched the Remote Pilots Council to 

gather those pilots that are starting to fly under Part 107, have 

been for the last 8 months. In nine cities around the country we 

met with folks. The FAA participated in all of those meetings 

which was a sign of their collaborative attitude. 

And the biggest complaint of course, and that is what pilots do 

when we get together and we complain about the FAA, the biggest 

complaint, discussion point was how long it takes to get a waiver. 

No one was surprised by that and the FAA is, I think, making good 

efforts to try and reduce those times. 

And sir, you will recall that we had the same problem with 333 

exemptions back when that was the only way to fly commercially, 

but what happened over time was the swim lanes as it were what 

was required in order to get a waiver, what was required to get a 

333 exemption became clearer and clearer and that process got almost batch processed after a while. 

As I indicated in my written testimony, we really need to automate this process. The FAA agrees we need to automate this process and they are making best efforts to do that. The waiver process 

53 

should be much faster than it is today and as we go forward I 

think we will be. 

Mr. COSTELLO. Do you want to compare that to other countries? 

And Mr. Chidamber and anyone else, if you want to weigh in after 

Mr. Wynne sort of comparatively looks at how other countries address the issue. 

Mr. WYNNE. Anecdotally, there are places where it is less restrictive in—but I think generally speaking that it not necessarily in 

urban areas or congested airspace. So I think we are doing fine 

under Part 107. I think if we have got the ability to get the ability 

to do more things under waivers and ultimately we can fly over 

people, which is the next stage in the regulatory process we are 

going to continue to lead in this country. 

Mr. CHIDAMBER. I agree with Mr. Wynne completely. The FAA 

has made huge strides. When we did our first thing in 2015, we 

placed our requirements with the FAA. I think it was in February 

of 2015, it was only in June or July that we got the waiver. Now 

it is much faster, all of these things are faster. 

To address your question about how it is in other places, I think 

Australia and New Zealand are the two countries which have really 

been further ahead than everybody else in this matter. When we 

did our test with Domino’s in Auckland, I think the waivers were 

gotten within 24 to 48 hours which is a lot faster than what it is 

here, but so we should get faster as well. 

Mr. COSTELLO. Help me understand, Mr. Wynne, major companies have begun testing the capabilities of unmanned systems to 

deliver products and packages, how big would the products be or 

packages be? Look ahead 10 years, 20 years, at some point in time, 

logically, it will manifest itself to the maximum physical size. What 

do you think that looks like? What do you think the future holds? 

Mr. WYNNE. I don’t have a good way to answer that question because Uber Elevate just came out with a platform that you could 

get in and fly autonomously and they are wanting to operationalize 

that in 5 years, which is taking this technology and super-sizing it 

in some respects. 

But I think I backup from an economics point of view and say 

the vast majority, an astonishingly high percentage of packages delivered in this country are under 5 pounds. Congressman Price, 

when I was testifying before Appropriations Committee on Transportation last week, asked me to speak to congestion and capacity. 

We have enormous amounts of capacity below 400 feet, whereas we 

have very little capacity on the roads today. 

Mr. COSTELLO. Right. 

Mr. WYNNE. And with e-commerce continuing to advance there 

will be more and more trucks on the road delivering 5 pounds or 

less packages, which I think we could deliver when the airspace is 

empty at night for noise abatement reasons. So I think that it balances out at some point, but I think there is an enormous opportunity just up to 5 pounds. 

Mr. COSTELLO. Thank you. I yield back. 

Mr. LATTA. Well, thank you very much. The gentleman yields 

back the balance of his time. And seeing that there are no other 

witnesses, or members asking questions to our panel today, I want 

54 

to thank you again for being with us today, again very, very insightful. 

And pursuant to committee rules, I remind all members that 

they have 10 business days to submit additional questions for the 

record and I ask that witnesses submit their response within 10 

business days upon receipt of those questions. And, without objection, the subcommittee stands adjourned. 

[Whereupon, at 11:55 a.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. GREG WALDEN

Consumer demand drives businesses decisions all across the country every single 

day. Consumers want everything faster, cheaper, and on time. This is no small feat. 

Finding safe, reliable, and efficient solutions will require the best and brightest 

minds to marry cutting-edge technology, like sidewalk delivery robots, with a service 

that families have been using for decades to get pizza for game night. This hearing 

is a chance to hear directly from companies building their business plans around 

delivering the best product, service, and experience to consumers. 

Consumer safety is also top of mind as we hear about delivery drones, robots, and 

even self-driving delivery cars. Companies should be taking safety into account as 

part of their brand, and there should be reasonable oversight for new technologies. 

Creating an environment for safe new technologies to flourish improves consumer 

choice. 

In this hypercompetitive global marketplace, the consumer is king. Regulators in 

Washington, D.C. do not know what the next unicorn startup will be. It may be in 

the delivery space, it may be in commercial trips to space. We do not know. But 

we do know that if we do not allow for companies to responsibly put their services 

to the ultimate test, the consumer, we are guaranteeing failure for American 

innovators. 

As we continue to highlight industries and promote policies that will boost our 

economy and create more jobs here at home, we will need to continue examining 

policies that may be holding some of these business models back. The logistics behind these demands are daunting for American businesses. I look forward to hearing from the witnesses what challenges and obstacles their businesses face in today’s regulatory environment. I am also interesting in hearing from the witnesses 

about the competitive position of the U.S. marketplace in the global economy with 

respect to these emerging delivery technologies. 

The innovation agenda for this subcommittee sits on the cutting edge of our economy. There will be challenges, but we must keep our eyes on the horizon and open 

to the possibilities. Thank you all for being here. 

Æ