Amazon.com said it's working on the so-called Prime Air unmanned aircraft project in its research and development labs. But the company says it will take years to advance the technology and for the Federal Aviation Administration to create the necessary rules and regulations.
The project was first reported Sunday by CBS' "60 Minutes."
Amazon CEO Jeff Bezos said in a primetime interview that while the octocopters look like something out of science fiction, there's no reason they can't be used as delivery vehicles.
Bezos said the drones can carry packages that weigh up to five pounds, which covers about 86 percent of the items Amazon delivers. The current generation of drones the company is testing has a range of about 10 miles, which Bezos noted could cover a significant portion of the population in urban areas.
While it's tough to say exactly how long it could take the project to get off the ground, Bezos told "60 Minutes" that he thinks it could happen in four or five years.
Unlike the drones used by the military, Bezos' proposed flying machines wouldn't need humans sitting in a distant trailer to control them. Amazon's drones would receive a set of GPS coordinates and automatically fly to them, presumably avoiding buildings, power lines and other obstacles along the way.
Drone delivery faces several legal and technology obstacles similar to Google's experimental driverless car. How do you design a machine that safely navigates the roads or skies without hitting anything? And, if an accident does occur, who is legally liable?
Then there are the security issues. Delivering packages by drone might be impossible in a city like Washington D.C. which has many no-fly zones.
Bezos founded Amazon.com in 1994 after quitting his job at a Wall Street hedge fund. With Bezos' parents and a few friends as investors, Amazon began operating out of the Bezos Seattle garage as an online bookseller on July 16, 1995. The first book sold on the site was Douglas Hofstadter's "Fluid Concepts and Creative Analogies: Computer Models of the Fundamental Mechanisms of Thought." In the nearly two decades since, Amazon has grown to become the world's largest online retailer, selling everything from shoes to groceries to diapers and power tools.
Amazon's business plan has been to spend heavily on growing its business, improving order fulfillment and expanding into new areas. Those investments have come at the expense of consistent profitability. Investors have been largely forgiving, focusing on the company's long-term promise and double-digit revenue growth. Though it could be years before it's reality, drone-powered delivery fits well into the company's plans of making delivery as convenient — and fast — as possible.
One of the biggest promises for civilian drone use has been in agriculture.
The unmanned aircraft can fly over large fields and search out bugs, rodents and other animals that might harm crops. Then, thanks to GPS, another drone could come back and spread pesticide on that small quadrant of the field.
Agriculture is also seen as the most-promising use because of the industry's largely unpopulated, wide open spaces. Delivering Amazon packages in midtown Manhattan will be much trickier. But the savings of such a delivery system only come in large, urban areas.
Besides regulatory approval, Amazon's biggest challenge will be to develop a collision avoidance system, said Darryl Jenkins, a consultant who has given up on the commercial airline industry and now focuses on drones.
Who is to blame, Jenkins asked, if the drone hits a bird, crashes into a building? Who is going to insure the deliveries?
There are also technical questions. Who will recharge the drone batteries? How many deliveries can the machines make before needing service?
"Jeff Bezos might be the single person in the universe who could make something like this happen," Jenkins said. "For what it worth, this is a guy who's totally changed retailing."
The biggest losers could be package delivery services like the U.S. Postal Service, FedEx and UPS.
FedEx spokesman Jess Bunn said in an email: "While we can't speculate about this particular technology, I can say that making every customer experience outstanding is our priority, and anything we do from a technology standpoint will be with that in mind."
The U.S. Postal Service wouldn't speculate about using drones for mail delivery. Spokeswoman Sue Brennan referred any questions to Amazon.
Amazon, one of the Postal Service's major customers, recently partnered with the agency to begin delivering packages on Sunday in major metropolitan areas. Sunday service will be available to Amazon Prime members in the New York and Los Angeles areas first, followed by other large cities next year.
Amazon's stock dipped 25 cents, or less than one percent, to $393.37 in Monday afternoon's trading.