Economic analysis of UAV application in mail delivery

Application of Unmanned Aerial Vehicle (UAV) has gained a significant attention for delivery services. Major commercial service providers, such as Google and Amazon, are now investigating its potential and advocating for pushing the regulatory limits for implementation purposes. In this paper, the economic feasibility of using UAVs by United States Postal Services (USPS) in Los Angeles (LA) county is studied. The population of urban areas is growing and so is the demand for mail delivery, therefore it is worth investigating alternative delivery methods. This economic analysis probes into the minutiae of investing in UAV delivery and discusses the contributing factors such as building and mailbox retrofitting, employee training and salaries and tax consequences. Through present worth analysis rate of return analysis, three alternatives of: 1) delivery to apartment complexes, 2) delivery to houses and 3) delivery to apartments and houses in LA county will be investigated. The results show that all three alternatives are substantially profitable, while alternative 3 generates the highest return on investment.