Flying over obstacles

Drones are being used to inspect hard-to-reach areas of roofs, building facades, bridges and industrial plants to find damage and wear. Drone images of job sites and farm fields are run through sophisticated software to survey the land. Infrared cameras mounted to drones can scan an entire building in hours and make a computer model showing heat loss. Then there are all the applications for events and wedding videos. With price points for drones starting at $2,000 and swiftly heading up into the $30,000 to $50,000 range, the entrepreneurial rental person’s antenna should be twitching.  The market demand is there, but stepping into the drone rental business requires navigating some tricky hurdles.

Peter Dueck is part-owner of a brand new start-up drone service, Aerial Imaging Resources in Flin Flon, Man. The company received its first gig earlier this year, but only after a lot of preparation on the part of Dueck and his partner, Thomas Stanley-Jones.

“People don’t understand the legalities to actually operate these things,” says Dueck.

People may encounter references to drones through the media in a number of ways: as a warning (“Drone flies close to plane landing at Winnipeg airport,” June 13th, 2016, weathernetwork.com); as a eureka moment (“Why drones could save door-to-door mail delivery,” June 22, motherboard.vice.com) or as a plot device (“Chopper,” Chicago Fire, Season 3, Episode 8). And, recently, firefighters were asking for drones to be grounded near the Fort McMurray fires as they posed a danger to helicopters, water bombers and other airborne firefighting vehicles.

Dueck says one big hurdle is for the public to understand the notion of “exemption areas.”  (For a simplified breakdown of Transport Canada’s rules for operating drones, see Transport Canada’s flowchart at tc.gc.ca > Getting permission to fly your drone).

“If you’re operating a drone when you’re not around people, places or things – that is a very simplistic way to put it – you can operate in the exemption area where you don’t need to phone Transport Canada. Otherwise you need a Special Flight Operation Certificate, an SFOC. Basically Transport Canada has these exemption areas defined where it’s a lot easier to fly. But you have to be five nautical miles [nine kilometers] away from any built-up area or aerodrome. A built-up area is something like a farmyard with cattle or pigs or obviously a city. Any kind of controlled airspace, too.”

This may not necessarily be something that your average drone flier takes into consideration. A rental operator providing a drone might want to ensure that their customer is aware of these rules.

“With drones, if you can get the permits for them, fine, but that’s the thing: you can’t just do it,” said Alan Castell of Alpha Drones, a Winnipeg-based drone company that’s only a few years old. “You can do it as a recreational thing and you can go film your kids in a park, and as long as you stay within the line of sight and stay safe, then you’re OK. But the second someone gives you a dollar, that’s it. The rules change, it becomes a commercial thing. So, for that you need insurance and you need to be under a certain weight and out of a certain distance. You need to file a NOTAM [Notice to Airmen], you need to know what a NOTAM is.”

Says Dueck, “If you’re going to fly a drone in the middle of Winnipeg, you need an SFOC, and that means you basically have to file a NOTAM and you’ve got to go through Transport Canada to get the approval. So you’ve got to phone them before and after every flight. And flying in the city is not something that Transport Canada is just going to let any Joe Blow do. It’s going to be extremely highly regulated; you’re going to have all your health and safety procedures, everything in place to show them that you’re actually a competent operator.”

Dueck also says don’t forget about liability – another thing a rental store would want to warn customers about.

“If you are trying to make any money off this, you need to have an SFOC and you need to have insurance, and a lot of people just aren’t doing it,” he says. “I think that’s the biggest misconception. They don’t really understand that you still need to do all this, even if you just buy a toy from Best Buy.”

Added Castell, “On the commercial side of it, if you’re screwing around with Transport Canada, you’re in big trouble. They’re going to get you, especially when they are very sensitive to it right now because of the idiots that put one up to 900 meters, and because of Ottawa having one come close to their airport.”

With the growing popularity of drones, time has become a factor even for people doing things by the book. There is a growing demand for Transport Canada to respond to the many requests for flight approvals.

“The documentation said you should get a response in about six weeks. Our first response was probably closer to about three or four months, just because of their backlog,” said Dueck. “We applied for 2017 and there’s actually a big disclaimer that says due to the backlog or due to the number of applications, things are just going to be slower. So how Transport Canada’s going to deal with this, I really have no idea.”

In terms of how the rental sector is accommodating the demand for drones, it depends where in Canada you are. In Manitoba, for instance, it’s not happening.

Toronto has a company called SkySnap that offers drone rentals from $160 per day for a Phantom, to $760 for a Draganflyer, which needs two people to control and which “requires proof of prior operation of similar UAVs.”

Peter Dueck was having difficulty in his neck of the woods, however, being able to rent something a little more powerful.

“We were actually looking at renting a fairly expensive UAV system for agriculture applications, and I would say this rental market in UAVs is slim to none,” said Dueck. “Even though we have a successful track record, they were very hesitant in renting to us because we never used that very specific system before, even though it has the same components. And I would say that crashes in UAVs, it’s not if it happens, it’s when it happens. I would say every operator is going to go through a crash or something unexpected at some time. So, rental, I think it’s probably too risky at this point. Maybe at a point when all the hardware comes down to hundreds of dollars, instead of thousands of dollars, it would be more realistic. I would think trying to find rentals in this industry is still definitely a few years off.”

Alan Castell agrees.

“The leasing companies I’ve spoken to, because I’ve inquired about this, because there’s drones for agriculture that I’m looking at getting involved with personally that are in excess of $30,000,” said Castell. “So would I want to buy that when I know the technology changes in two to three years? Of course not. I’m not stupid. I don’t want to buy it, I just want to use it and I want to pay a certain amount. I want to make more than that using it. And not have to own it at the end. But the leasing companies aren’t funding these things. I have tried three different leasing companies and three different leasing companies said no.”

dams

Then there are the cost considerations. Would it be affordable for dealerships to rent out such an expensive piece of equipment that anyone is able to fly and that most people will crash?

“Would it make sense?” asks Castell. “I guess it depends how much you’re charging but I think you would have to charge more than your expectation, just because of the nature that there’s going to be repairs. Do you really want to wait four weeks, minimum, for your thing to come back? Most of the guys here, I see the repair bills. Drop that thing into the ground, it’s $700 to start with repairs.”

Can you say, “damage waiver?”

The skill deficit also makes the adoption of drones by the rental industry a tricky prospect.

“Things happen where you don’t even realize it and you have to have more skills than autopilot. And a lot of guys don’t practice, they don’t take a little one worth $80 that you buy at a hobby store and fly it around your house, just a little one that won’t hurt anything, just to get the sense of how they work before you put $2,000 or $5,000 in the air.

But Castell sees it from the renter’s side, too.

“Renting them would be great because [owning one] is cost-prohibitive. But the whole downside to me is that they’re actually getting cheaper and pretty soon the rent-to-buy difference isn’t going to be that much. I mean, how much are you going to charge when it’s a thousand bucks to get a good one?”

Yet, Castell sees an opening.

“I think the agriculture (scenario) would make sense. If you could go to farm dealers, the agricultural drones, the $15,000, $20,000, $30,000 ones, that would make sense to rent versus the $2,000 Phantom.”

“The classic person you’re going to get renting the $2,000 Phantom is somebody who’s going to put that thing into a wall. The guy that’s coming to you that’s putting his name down on a $30,000 agricultural drone or land surveying drone, that’s the guy that’s probably going to put a little bit of effort into actually using it properly.”

So renting drones would not be as simple as renting a drain snake. Your staff would have to be able to answer some questions about where and how the drone can be used and by whom. You might want to insist on seeing some proof that the customer has completed the Transport Canada certification that exempts them from having to file flight plans. You’ll also want to be amply protected with damage waivers and insurance. Yet your store probably rents equipment that is more dangerous, more expensive, more regulated and requires more training to use all the time. Maybe there is a chance here for your profits to take flight.