Drone Business

The Anatomy of the Drone Service Providers (DSP) Market

The Good – drones bring value and opportunities

Drone technology can bring a lot of value to businesses: innovative and cost-effective ways to complete tasks that were performed by humans that took a lot longer, potentially dangerous, and more expensive to accomplish (ex. inspections of hard to reach places, surveying, substitute for old/expensive solutions for aerial filming/photography, having ‘eyes in the sky’ for documenting work, etc.).

Several industries realized the value right away and have fully embraced this solution, spurring a flurry of DSP (drone service providers) entrepreneurs and startups to provide these services. And as drones get solid traction and more use cases with many industries, the drone industry is projected to grow to $43 Billion by 2024, according to COMPTIA report, with a compound growth rate (CAGR) of 20.5%, greatly outpacing growth rates of many industries, including IT. So with such an opportunity, the Drone Service Provider (DSP) market is growing rapidly.

In short, drones are bringing a lot of growth opportunities and economic value for enterprises and entrepreneurs. But, because the industry is so new, regulations and standards (FAA, industry, state and federal, etc.) are largely still developing and changing rapidly, as are enterprise use cases, it can be hard to understand the landscape of the drone service providers (DSPs) if you are a business owner or a manager looking to hire them.

The Bad - Hiring a drone company or a pilot is like gambling

Let’s imagine this scenario: you are a business owner or a manager in construction, engineering, video production, marketing, etc. (in short, any industry that could use drones) and decided you want to hire a drone pilot to do a job for you. This job could be anything from flying a drone to document the progress of a construction site or proof of work, inspect an oil rig, showcase commercial real estate, shoot aerials for a video you are making, etc.

Finding someone you can trust your project to can be a challenge unless you have a vetted and proven drone company/pilot you employ or you have contracted with before. Most likely you will do a web search for a drone pilot or a specific drone service you are looking for, and then you will get numerous paid ads and search results offering those services.

And here is what you need to know about the drone services providers (DSP) market in the United States: the market is very new and fragmented, and it can be hard to navigate. There are only a handful of national enterprises that operate in this industry, the rest are either small regional and niche companies specializing in a certain service or industry (ex. oil, gas, AEC industries, aerial cinematography/video, real estate etc.), entrepreneurs (aka drone pilots that can cover several industries), or ‘uber for drone pilots’ drone pilot network platforms (such as Drone Base, Drone Hive, Drone Up, etc.). These companies all need qualified drone pilots operating for them in the specific location required by clients to complete the task, regardless of the industry.

Some of these companies grew out of drone pilots starting their own companies (so they are operated by them), but many grew out of a recognized market opportunity, so they need to find pilots to fly for them. This isn’t easy to do, as finding a good pilot is like looking for a needle in a haystack of people self-proclaiming as qualified drone pilots.

The truth is, it is easy to get into the industry and call yourself a drone pilot or a drone services provider company.  Commercial drones are within reach to purchase for under $2K nowadays. Anyone who wants to invest their time and some grit can study, pass and receive an FAA Part 107 commercial drone operator certificate, and put up a website to advertise their services. And voila, they have a drone services business presence that makes it look like they are legit!

In reality, this may be a company that doesn't have their own pilots, or is operated by a self-proclaimed pilot that has hardly flown before, who may not have a commercial drone pilot license, or insurance, and very possibly has never done the type of job you want to have completed. See our blog post Things to Consider Before Hiring A Drone Pilot for more details on this topic.

So, you are really gambling as you are trying to find someone you can trust in your specific location to do the job you require – the market of drone services providers is still new and is a bit like the Wild West right now.

Some companies out there (especially national companies serving oil/gas, telecom, and energy markets) are starting to employ and train their own drone pilots. These industries require specialized skills and services performed at a regular cadence. It is also easier to ensure that their customers will get quality service consistently when hiring and investing in proper pilot training. These companies train pilots to fly proficiently and execute specific tasks they require (video/photo, aerial inspections, surveying, and photogrammetry).

However, most companies do not employ their own pilots, so when you submit a request for your service through a drone pilot network company that doesn’t employ their own pilots, you will be dealing with a ‘middleman’ company that will connect you with a drone pilot, whether from their existing contacts in the area (someone they’ve hired before for another client) or from another area that will have to travel to your location (and therefore charging more, most likely). And if the job at hand is rather simple, not requiring specialized skills in flying, shooting high-quality video/photo, or gathering data in a specific way, it may be an effective solution for you.

But you should be aware that many of these drone pilot network companies do not vet their subcontractors properly, and in many cases, these pilots get paid low wages (the middleman takes a cut, of course). You will not get the best-qualified pilots to perform your task and will most likely have limited direct communication with them to prevent those pilots from acquiring you as their own client.

And while this business model of drone pilot network serves well as a marketplace to connect clients with pilots, these pilots may not be highly skilled and use the middleman service to gain proficiency (using this as paid training) before branching out on their own or being employed as drone pilots full-time for a company that has its own drone program.

The Ugly - You Take on Risks

So, if you have contracted with a company that doesn’t employ its own pilots or doesn’t vet them properly, what are the risks?

Here are the top 4:

1)      Fines. If you have hired a drone pilot who doesn’t hold an FAA Part 107 license or is operating outside of the FAA Part 107 guidelines (including not registering drones, flying without additional airspace authorizations when required, etc.), you are opening your company to potential FAA fines.

Recently the FAA fined a drone pilot $182K for repeated violations, as detailed in this Forbes article. While this may be an extreme example, you don’t want to get in ‘hot water’ with FAA or local law enforcement, let alone get your business dragged through the bad PR a drone incident could generate. Drones are still a new and sometimes controversial technology, so drone incidents tend to make TV, front page, and social media news.

2)   Damage liability. If you don't ensure that the drone pilot you hire has drone business insurance or puts your company as an 'additional insured' as an additional way to defer potential liability away from the client, there is always a potential that your company may be liable if something goes wrong. Drones do crash, can cause property damage and personal injury, and that cause could be anything from weather-related, technology failure, or pilot error, regardless of their skill and qualifications.

3)   Wasted resources (time and $). If you don’t have a way to communicate your requirements to the pilot directly, or don’t know their experience with the type of job and data output you require, that money you just spent may have been wasted – you may not get the output you need, or the quality of the output may not be up to your standards.

4)  Reputation. If you are the business owner and the drone pilot you hired didn’t work out in some way, you will learn your lesson and move on. But, if you are a manager within a company that oversees outsourcing these jobs, your career and reputation in the company and industry may be at stake.

To sum up, if you want to hire a drone pilot consider coming up with requirements to vet them, and/or ensure that the companies you hire vet the pilots according to your specifications. These requirements should include the basics and go beyond them, especially if you have a complex technical deliverable that will need to integrate into your workflows or you expect video of certain quality and professional photography output.

V1DroneMedia is owned and operated by its Chief Pilot Jason Damman, a professional airline turned drone pilot, with 25+ years’ experience in remote-controlled aviation, 20+ years in commercial airlines, and 5+ years in commercial drone operations. Jason is a drone and aviation practitioner and educator, performing complex drone jobs in various industries (see our Portfolio and YouTube channel for examples of our work), and is also a certified flight instructor, including training drone pilots.

Contact us for a consultation today. V1DroneMedia can help you complete a drone job, train your pilots, or help you to set up a drone operation of your own!

 

Drone Pilot - Airline Pilot's Plan B During The Pandemic

My airline history and job status with the pandemic

My name is Jason Damman, and I am a 20-year captain with ExpressJet Airlines (doing business as United Express and Continental Express before the United and Continental merger). I know that many pilots, much like me, are sitting at home/not flying due to the COVID epidemic. Many of us are on company leave, on reserve out of the base, waiting for furlough once the government aid to the airlines runs out, or potentially already lost our job and looking for a new one. While this type of industry slump isn’t something that we could have predicted when we started pursuing aviation careers, events like 9/11 and the COVID epidemic can cripple our industry and turn everything upside down in a matter of days.

Looks like this time around with COVID the industry took a nosedive for a while (way worse than 9/11), and according to many sources, it is not expected to fully recover to pre-COVID levels until 2022. Of course, we all hope that this will not be the case, but at this point, we must assume this is the state of things for the foreseeable future.

What else can you do with your airline pilot skills?

While I am in this limbo state, it doesn’t stop me from working on my side gig that has the potential to develop into a full-time gig if enough time is put into it (and we have lots of it now). This side gig is a Drone Services Provider (or DSP) business, which is much easier to get airborne with (pun intended) if you have an airline pilot license than for anyone else. Because any certified pilot can get certified to fly drones commercially (FAA Part 107 certificate) much quicker than folks that are not. This is usually one of the biggest obstacles for people who want to fly drones commercially, as getting Part 107 FAA certification requires passing an aeronautical knowledge exam, like what you must pass for a private pilot certification. You can find detailed information about getting this pilot certification on the FAA website at here and here.

The reason I am here telling you about this is that if you are a certified pilot, you can do this too, while you are in this limbo state with lots of time on your hands. This will give you another skill/tool to help you in your job search beyond airlines, if that’s what you are doing now.  I don’t know how many companies are hiring pilots now (maybe private jet management and cargo transportation companies), but even they have a limited capacity to absorb the pilot surplus that is being created with the pandemic disrupting the airline industry.

State of the Drone Industry in 2020

Remember how there was a pilot shortage in the airline industry just a few months ago? Well, there is kind of a similar situation in the drone industry now - lack of qualified, knowledgeable drone pilots to complete flight missions for companies that have nationwide needs. Although many of these drone gigs are contract or per property/asset, meaning you can choose to do them when you have time, there are already many full-time jobs available also, and new jobs/job descriptions are being created every day due to a lot of drone experimentation and new use cases and workflows being created in various industries. 

Do a search for drone pilot jobs in whatever job search engine you use, and you will see the openings, in different industries and with different pay scales. If you have other than aviation degrees and professional experiences (especially photography, cinematography, software development, engineering, construction management, surveying/mapping), you will be even at more advantage in this industry. A 2013 industry report released by the Association for Unmanned Vehicle Systems International projected more than 100,000 new jobs in unmanned aircraft by 2025.

And the actual drone pilot work is mostly contact-less, so it is COVID and quarantine friendly.

What’s more, due to drones disrupting so many industries with faster, cheaper, more efficient solutions to completing tasks traditionally done by humans or other tools, the drone industry is predicted to experience growth rates far outpacing those of many traditional industries (including airlines). Here is a Business Insider Intelligence Drone Market Outlook outlining drone use growth in major industrial and service industries.

Is drone business a viable long-term job/income replacement?

Will becoming a drone pilot replace your income? Probably not, or at least not right away, but again, it all depends on how much you choose to pursue it and market your services. You can always use this as a side gig to supplement your main income, especially if you don’t have a regular 9 to 5 job (which is the airline industry, essentially).

How to get started in the drone industry for airline pilots

Of course, getting a Part 107 certificate will not make you an experienced drone pilot, that is just the first step.

I grew up building and flying radio-controlled airplanes, which is how I got into aviation, so I already had a lot of experience in remote control flying prior to picking up a drone. So, when I started experimenting with drones, I picked it up pretty quickly due to that past experience, but even then, I put in a lot of time practicing my flying, photography, video skills and learning various software processing tools - skills which even now, 5 years later, I am still honing every week as I am working on projects for clients.

So for someone who has never picked up a drone before, the next step after getting your Part 107 certificate would be to get proficient in flying (just like with the airlines, you need to get those flight hours in), and then honing other valuable skills that enable to produce value out of visual data that was captured, not to mention getting your name out there to be considered for drone jobs. However, the possibilities in this developing industry are endless, if you have the interest and the drive.

The easiest way to enter the drone industry is by providing videography and photography services (although most competitive, as well), and that may be the way to get started, but you can take it beyond that and develop skills to use drones in Search and Rescue, Surveying, Mapping, Construction, Delivery, Agriculture, etc. Possibilities are endless if you have an interest and the drive to grow and make this a legitimate side gig or your next career.

If you find this information helpful, please share with your network, airline industry friends, and relatives, and leave comments so I can gauge if this was helpful and whether I should cover the subject of drone business setup in more detail because there is a lot more to it than just FAA Part 107 Certificate to get started!

Also please check out my Website if you are interested in learning what type of work I’ve done and what industries I serve, contact me for job inquiries, and follow me on Instagram, Facebook, and LinkedIn!

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