Google starts droning on about home delivery

Another one of Google’s bright ideas is starting to bear fruit as subsidiary Wing starts testing an air delivery service in North Canberra, Australia.

Almost every company on the planet searches for the diversification holy grail, but few have the patience, investor confidence and bank accounts to see through the quest. Google is one of the rare exceptions. A company which seems to revel in investing in the preposterous, giving every idea as much capital as necessary to ensure it can be a success, should the conditions be right. Wing is another example of this.

“Today, we are excited to be launching our first air delivery service in North Canberra,” the Wing team wrote in a Medium blog. “Our service allows customers to order a range of items such as fresh food, hot coffee or over-the-counter chemist items on our mobile app and have them delivered directly to their homes by drone in minutes.”

The initial service will only be available to a limited set of eligible homes in the suburbs of Crace, Palmerston and Franklin for the moment, but the ambition is clear; drones can disrupt the logistics and delivery segments.

The first partners of the service will be Kickstart Expresso, Capital Chemist, Pure Gelato, Jasper + Myrtle, Bakers Delight, Guzman Y Gomez, and Drummond Golf, allowing customers to choose from a range of goods, though Wing has stated it is open to new ideas.

Starting in 2014, Wing has been working to realise the drone delivery dream in Australia. Live trials started 18 months ago, delivering food, small household items and over the counter chemist products to more than 3,000 times to Australian homes in Fernleigh Park, Royalla and Bonython. Progress might have been slow, but that never seems to bother the Googlers.

The pursuit of disruption is becoming somewhat of a speciality for Google, either through acquisition or nurturing ideas in the Moonshot labs. Loon is another idea few companies would have thought realistic, but in signing a partnership with Telkom Kenya, Google is proving the delivery of connectivity through balloons is a perfectly reasonable business plan.

This is not to say every Google idea turns out to be a raving success. Google Fiber started off well but soon got canned as the search giant realised fixed line connectivity was much harder than it first seemed.

This is of course not the only attempt at monetizing drone technology through home delivery. AT&T has been creeping forward with its own drone programme in the US, while Amazon has been conducting trials in the UK, and Vodafone delivered an iPhone to a customer in New Zealand. All of these trials would have been deemed successful, though you have to wonder whether they are commercially viable.

For Amazon, the idea of drone delivery makes sense. Having drones to deliver goods from fulfilment centres to remote locations answers a difficult logistics issue, while AT&T and Vodafone might be able to craft a connectivity offering, but Google has something which many of these companies do not; existing relationships with numerous businesses, irrelevant as to whether they are large or small.

Almost every business in the developed markets will have a relationship with Google, such is the power, influence and simplicity of the platform. This extends from listings in the search engine, the Maps products or through to the YouTube platform. This offers an incredible opportunity to leverage relationships and make an idea which might not be considered commercially viable profitable.

Once again this demonstrates the power of the internet and new technology. Through a simple app, customers will be able to do more without leaving the flat, while businesses will be able to expand the perimeter of their operations.

Of course, you have to consider whether local and national governments are ready to foster this kind of entrepreneurship, but that has never stopped the internet giants before. Google is showing its pedigree for innovation again, taking an idea which seems ridiculous and potentially making it work.

California to ban zero-rating in net neutrality mission

In what has been described as the ‘strongest net neutrality policy proposal in the country’, Senator Scott Wiener has tightened up his proposed bill to reinstate net neutrality in California, with the updated version banning zero-rating.

While the net neutrality debate has been quite effective at gaining the support of the general public in the US, perhaps this updated version of SB 822 will catch some by surprise. Up until now legislators and advocates have drummed up backing by focusing on how the big, bad internet companies will dictate experience and service to you and will take away your freedom of choice, but it hasn’t mentioned banning zero-rating initiatives. These are offerings which consumers like and will probably want to have in the future. It’ll be interesting to see whether consumers are still as supportive when they realise net neutrality has its downsides as well.

The general public is a very fickle beast. There is certainly a better-than-thou attitude when it comes to certain issues which only have an indirect impact on the consumers life. Many will support initiatives to make the world a better place, assuming it does not hit them in the pocket. For example, many will say they support farmers or sustainability or animal welfare, but the more expensive, corn-fed, free-range organic Chicken does not fly off the shelves.

People are social warriors for positive change and fairness, until it effects their wallet. It is highly cynical of us to say and some might protest at the statement, but it is true. Most people reading this article will probably admit, if they are being completely honest with themselves, the vast majority of decisions are made with personal benefit in mind not for the benefit of society. Wiener might well find this is the case after explicitly banning a feature which benefits the consumer.

Looking specifically at zero-rating, Weiner highlights the practise is distorting and manipulating consumer choice by subsidizing favoured content. It is one way in which the telcos are influencing consumer behaviour based on commercial relationships. The important thing about net neutrality is the second word. Telcos are supposed to remain neutral when delivering the internet to the consumer.

“An open internet is essential to maintaining our democracy, growing our economy, protecting consumers, and preserving critical health, safety, and energy services,” said Senator Scott Wiener. “Internet service providers play a key role in allowing people to access the internet, but ISPs must not be allowed to decide who can access what websites or applications.

“Without net neutrality, ISPs have the power to manipulate which business, media, non-profit, or political websites are accessible and by whom. SB 822 contains strong, comprehensive, and enforceable policies that will position California as a leader in the fight for net neutrality.”

Of course, zero-rating is only one of the rules which are being discussed in the bill. After being initially introduced in January, Weiner has taken a couple of weeks to redefine the language and create a more comprehensive set of rules. We’ve outlined below the main points Weiner would like to enforce:

  • Prohibits blocking, throttling, or interfering with any content, service, or device
  • Requires that all data traffic be Application Agnostic
  • Prohibits charging access fees to services to reach consumers
  • Prohibits engaging in paid prioritization
  • Prohibits offering economic discrimination practices such as zero-rated data

This is not to say that the ISP would not be able to prohibit or prioritize traffic, but there would have to be some serious justification. There will of course be some technical reasons some traffic might have to be interfered with and this might be the make or break of the bill. Weiner will have to be very careful to build in suitable justification, accountability and transparency measures to allow for this. The language will have to be very clear and considered, as any contradiction or confusion will immediately be jumped on by ISP lawyers, possibly leading the bill to the scrap heap.

As mentioned in previous articles, we are not too sure whether such a heavy-handed approach is appropriate for the successful future of the internet and its delivery. Such comprehensive legislation doesn’t offer the ISPs the opportunity to make additional revenues. The last couple of years have demonstrated that simply being a company which delivers data plans is not enough for the telcos, which will not be a good thing.

The telcos have to be given the opportunity to make money, not because the fat-cats have got used to bonuses, but because cashflow directly impacts the amount which is allocated in the CAPEX column. The less money the telcos make, the less will be directed towards CAPEX, which will potentially impact the performance of the network. If the telcos are making less money, they are spending less on tackling the increased consumption of data. This is a net loss in the long-run and we do not think this is a nuance of the argument which has been considered by Weiner and his army of preachers.

We’ve said this numerous times, but the partisan nature of US politics is its own worst enemy. Left-sided regulation is going too far to limit the activities of the telcos, while the right-sided wild west would not be healthy for the ecosystem. The pendulum is swinging too aggressively, and we hope it won’t be too long before the fair, responsible and appropriate middle-ground is found.