Amazon and FAA clash—risk-taking entrepreneur vs. risk adverse safety regulator

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No doubt about the FAA has taken its time drafting and issuing its proposed rules for sUAS. Equally clearly, Jeff Bezos and his team at Amazon are extremely frustrated with the deliberations of the government in creating a policy for their visionary distribution system. It was a Clash of Cultures; by understanding both perspectives, the combatants might come to a better solution.

The founder of Amazon is an entrepreneur who thrived on initiating disruptive innovation. His enterprise makes a huge and diverse inventory available to anyone, anywhere over the internet as well as quickly delivered to the consumers’ home. The definitive biography about the man and his venture, “The Everything Store: Jeff Bezos and the Age of Amazon, makes it clear that the culture instilled by Mr. Bezos can be aptly described as “relentless” , the term used by Michiko Kakutani in his New York times review of the book. In taking his concept from vision to reality, the Amazon team overcame many, many seemingly insurmountable obstacles (for aviation context; think Fred Smith and the Marine drive to make FedEx a reality). Having defeated restrictions on their operations, overcome a constant cry from Wall Street that their finances were doomed. They were able to recruit staff, from executives to clerks, who were committed to maximum, 24 hour schedule. Most importantly and relevantly, they compelled, by their own wills alone, commercial and local restrictions to dissolve. At present they have created a company which Forbes ranked as #24 Most Valuable Brand, #6 Innovative Companies, #98 in Sales, #573 in Assets and #35 in Market value.

Such success proves that being “relentless” is the company’s preferred method to reach their goals.

The FAA is, in many ways, the antithesis of the Amazon model. Taking risk and regulating safety are not congruent concepts. Preventing accidents is the mission of this governmental organization and failure to achieve that goal is met by severe criticism by the press, the public and Congress. That reality translates to conservative staff and cautiousness in their administration of its rules.

To further limit its discretion, Congress established statutes which define its priorities in determining the airworthiness of an aircraft and its operator. The list includes the FAA Act, the Administrative Procedures Act, its regulations, its own policies, procedures and budget and a host of other constraints. One of the principles gleaned from that set of legislative directives is that the FAA must treat all applicants/operators with similar status in the same way. Stated in other terms, the FAA may not discriminate among companies which have comparable capabilities. While Amazon may regard itself as special, the FAA would be hard pressed to grant it treatment different than other sUAS operators without some further justification.

Another trait of safety regulation is that the government must not assume that new technology will be safe in operation. There is no debate that sUAS do not have significant history flying within communities. The tested way to address such risks by using the statistical analyses of Safety Management Systems to determine what specific parameters will assure the public’s safety.

The review by the team which reviewed the sUAS potential safety problems recommended limits greater than what Amazon has defined for PrimeAir. The response was relentless; Amazon threatened to move its drone test operations overseas. When the FAA issued an Experimental Airworthiness Certificate, the company laughed saying that the model UAS approved by the FAA is no longer its lead aircraft for PrimeAir (it would be interesting to know whether the applicant bothered to tell the agency that it had moved on to another test bed?). Then it went to Congress and testified that the FAA was too slow and made a caustic comparison of the FAA to other CAAs:

“Although the United States is catching up in permitting current commercial UAS testing, the United States remains behind in planning for future commercial UAS operations…”

That is akin to comparing some local department store with deliveries to Amazon; the physical jurisdiction and the level of flight operations of the CAAs which have granted UAS freedom are fractions of the FAA’s scopes. Senator Booker (D-NJ), who is drafting a bill which would grant all of Amazon’s wishes, made the following quip after the witness said something nice about the FAA’s progress:

“’Let the records show you sufficiently sucked up to the FAA,’ Booker replied, jokingly.”

The Senator’s joke might have been good strategy for Amazon; its relentless approach did not convince the regulator that it should ignore its statutes and regulations for the company.

At the same time, the FAA’s conservative safety culture has problems dealing with entrepreneurs. It is all too easy to say “no” when an applicant demands/requests permission to do things which do not fit into the agency’s predetermined boxes. People, who approach the FAA with visionary concepts and without significant understanding of the statutory/regulatory constraints, often are frustrated.

Good guidance would have instructed Amazon to assemble parameters of a test program, support its request with sophisticated and supported safety risk analysis and ask for an exemption under 49 USC §44701 (f) . This statutory exception was created by Congress to permit the FAA to test new concept. For example, the initial program for commuter, now regional, air carriers was authorized by an exemption. Amazon, as the early leader of sUAS research and operations, would have been the best choice for such an experiment. Its accumulated experience would have made it a natural candidate to develop a data base about the reliability of these aircraft, and their failure mode, among a whole host of parameters about which the FAA needs information. It would have been a symbiotic relationship—the FAA desperately requiring real world operating numbers and Amazon seeking to advance its sUAS technology.

Unfortunately given their contrasting corporate cultures and risk profiles associated with their missions, Entrepreneur Amazon and Safety Regulator FAA were doomed to failure without the aid of someone who understood both agendas and their respective jargons. Relentless is not always the right approach; know your regulator as you would know your customer.

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