This article first appeared in slight different form on Eric’s website.

TL;DR: The new Part 107 law will make it easier to be a commercial drone pilot. That means there will be more competition for jobs and more competition for aerial services. Prices for aerial services will be lowered and margins trimmed. Differentiation will be key for UAV pilots and service providers to compete. Pilots will be forced to differentiate based on safety records, flight hours, and portfolios. Companies will be forced to differentiate based on similar attributes as well as specializations, area coverage, and timeliness of response.

In my day job at Skyward I routinely help folks navigate regulations and build professional drone operations. And because I’m around drones so much, enjoy flying, and am an amateur photographer I’ve often considered trying to establish myself as a commercial drone operator. It would give me the freedom to accept gigs every now and then and the motivation to continue developing my skills as a remote pilot.

Up until June 21st the barrier to entry to the drone market as an operator was just too high. The rules from the FAA have been very clear; I would need a minimum of a sport pilot license and a section 333 exemption before I could sell my work or be hired for a gig. That’s at least a $10,000 hurdle with a lead time of 6 months to a year. The 333 line has been backed up for quite some time and many of our professional services customers at Skyward have been waiting much longer than the stated 120-day wait time for their 333 approvals. What I’m saying is, for a guy who would only be a professional part time $10k is way too much.

But on June 21 good news came in the form of new drone rules, called Part 107! On August 29 the FAA will allow pilots (and I say pilots because even though we’re on the ground we’re still operating aircraft in the same airspace as manned aviation) to legally operate drones commercially if they have a remote pilot certification and are flying an aircraft that weighs less than 55 lbs and travels less than 100 mph. Part 107 will allow commercial drone pilots can legally fly for customers as soon as they can pass the 60 question exam (after August 29), pass a TSA background check, and pay the $150 for the test. $150 << $10,000.

The barrier to entry has been lowered, I’m going to take advantage

Part 107 effectively lowers the barrier to entry for drone pilots across the country to access the growing wealth of jobs available in aerial work from photography and videography to bridge inspections. Certain jobs will require certain aircraft capabilities and major enterprises would likely require a minimum number of pilot hours or specific amounts of insurance coverage, but the bottom line is I, along with thousands of new pilots across the US, have the ability to compete for those jobs. The market effect will look like this:

  • Flood of newly credentialed pilots available for work = more competition for jobs amongst established drone companies
  • Flood of entrepreneurs starting drone imaging businesses = more competition in the aerial services industry

Part 107 will mean more competition

Demand growth for aerial services is unlikely to keep up with the flood of available pilots. Therefore, increased competition will lower prices for the consumer causing margins to narrow for the aerial service provider. The pressure on margins will force improvements in operational efficiency in companies that want to rise to the top of the pack. Rates of innovative technology adoption will also increase in order to differentiate aerial service products.

Differentiation is necessary to compete

In order to compete companies and pilots will need to differentiate themselves. There are several aspects on which you can differentiate yourself or your business.

Differentiation on quality for a business means a focus on product and professionalism. For the pilot, it’s a focus on being the best drone pilot you can be, mitigating risk and manipulating the aircraft in a way that maximizes the quality of the product. An easy way to differentiate on quality as a pilot is to show off your flight ours and portfolio. For me my personal website is where I show off my portfolio and I’m able to use my flight hours badge from Skyward to demonstrate my experience level.

It is impossible to be all things to all people so the most effective way to differentiate your services is by becoming knowledgeable and effective in delivering services to a specific industry. Take Sky-Futures as an example. The founders made an intentional decision to target oil and gas inspection because of the high emphasis on safety and the availability of cash to spend on services. By targeting one industry they were able to learn the vernacular of the industry, invest in aircraft and payloads that met the operational characteristics required, hire pilots with experience operating in the required environments, and target their marketing toward customers in the industry. In the end, all actions in their business operations make them the clear choice when choosing an aerial inspection service provider in the oil and gas industry.

For some consumers the size of the area covered by a company is very important. National news networks need mobile drone operators capable of covering the entire United States. To stay competitive, they need to be able to gather news footage quickly. Only an aerial services company with an expansive network of operators could cover such an area quickly. LIFT Technologies has found a way to do this with their network of drone operators. For cell tower inspection Talon Aerolytics has built a workforce of mobile operators capable of systematically inspecting hundreds of thousands of towers annually. Both of these companies have found a way to service a large area for their customers.

I touched on this above but some customers are willing to pay a premium for content gathered within a certain amount of time. An aerial service provider able to fulfill a request within a promised timeframe would be able to differentiate its services from competitors.

Whether you’re an established business or an operator like me just gaining the “professional” label, you are going to experience a more competitive environment in the drone industry after Part 107 takes effect. Margins will be cut as growth in available pilots and volume of aerial services companies outpaces demand, but the industry remains promising and exciting. Finding ways to differentiate yourself either as a pilot or a business will be vital to sustained success in the drone industry.