 When you think of a drone, you probably think of this. There's a new generation of drones that are being built to fly longer distances at jetliner elevations while carrying huge payloads. And these cargo carrying drones could be coming to an airspace near you. Cargo drones could potentially upend the logistics industry, making deliveries that are safe and efficient and environmentally sustainable, but they can also be a regulatory nightmare. There's a reason that giant companies like Google and Amazon and UPS are pushing ahead with their plans to fill the skies with cargo carrying drones. Money. Morgan Stanley estimates that autonomous urban aircraft could eventually become a 1.5 trillion dollar industry by 2040 and that includes everything from vertical takeoff and landing aircraft, flying cars, military UAVs, and yes, delivery drones. Now there are a whole bunch of delivery drones that are being tested today, but what if you want to receive something that's heavier than an Uber Eats order? Before they can rake in all that cash, drone operators are out to prove that these devices can deliver a social good and that's why so many pilot programs are focused on delivering medicine. Matternet is working with UPS to deliver blood samples to hospitals in North Carolina. Zipline is flying in medical supplies to remote locations in Rwanda. Swoop Aero is dispensing vaccines and other medication to tiny islands in the Pacific. All those drones exist today, but what about the ones that are still under development? The heavy lifters. Let's call them cargo drones, drones that are built to fly higher and further than anything available today all while carrying really heavy loads. So Sabrewing is working on a prototype that can achieve speeds of up to 180 knots in a cruising altitude as high as 22,000 feet. It's called Rhaegal, which yes is one of the dragons from Game of Thrones. Another is called Nautilus and it's working on a 30-foot prototype that's about the size and weight of a military predator drone. It'll be capable of transporting 700 pounds of cargo a distance of 2,500 nautical miles. The company is also working on a larger scale two-ton freighter about the size of a Boeing 777. Both companies are using measurements associated with boats because they're being designed to take off and land in the water and that's because they probably won't get the regulatory approval to fly over populated areas. Now speaking of Boeing, Aerospace Giant is working on its own heavy-duty drone capable of carrying payloads of 500 pounds. But what kind of work goes into building a cargo drone? To find out, we visited the offices of Elroy Air in San Francisco to see that company's autonomous Volt drones for ourselves. Elroy CEO Dave Merrill talked about the challenge of building an aircraft capable of carrying this kind of weight. At this scale, there's a lot more modeling that goes in, a lot more aerodynamics that goes in. You need more capital, you need specialized expertise for testing each building block. So it's really a different kind of effort than building a smaller drone system. Merrill said that while some companies are retrofitting their drones for autonomous flight, Elroy is building its aircraft to be self-flying from day one. They are being built to attach and drop cargo as well as take off and land without any human interaction. So the aircraft is able to land, taxi to a cargo pod, pick it up and then take off again without needing a person to come out and load or unload the system. We did that to save time so the aircraft can just stay always in motion, always being utilized. And they also are designed for much longer range. Most delivery drones, people are thinking about the last mile, we think about the last hundred miles. Elroy envisions its system being used to deliver packages over medium distances in rural areas or between distribution centers. The benefit of vertical takeoff and landing is that you have a lot more flexibility in where the system can operate from. So it can take off and land from an airport or a helipad, but also it can take off from a parking lot or the rooftop of a parking garage or even a field. The company hopes to have a fleet of autonomous drones in the air making deliveries by 2020. I don't think it's as far away as as we think, but I do think that companies are betting that some portion of automated flight are going to be moving stuff around that's not just small packages. This idea of using drones to move goods between giant warehouses is super interesting, but also it raises some valid concerns about energy consumption. A 2018 study in the journal Nature found that electric drones were way more efficient than trucks and vans and cars. A drone can reduce greenhouse gas emissions for package delivery in most areas of the country by a decent amount and in really low carbon electricity grids like out west and in New York State, it can reduce it by half or more. And though the study found that benefits may be reduced once the electricity used for recharging and warehousing was factored in, drones clearly have less environmental impact than a one item delivery by car. Today the big problem is regulation. The unresolved issues include whether it is safe to allow drones to fly beyond a pilot's visual line of sight, or to operate at night, or to fly over people. And to answer these questions, the FAA created a pilot program to see how a drone delivery system might look in real life. Wing and Uber are two of the companies participating, but not Amazon, which is instead testing its drones with a consortium of European companies in Belgium. The tech development race for urban air mobility is going on right now. The technology as it advances should think through how it's going to meet those certifications and make it make it safe for everybody. So whatever set of guidelines the FAA and the private sector come up with could have huge implications, not just for cargo drones, but also maybe for the way that we get around in cities in the future. Urban air mobility is increasingly a hot pursuit among tech and aerospace companies. As ridiculous as it sounds, the idea of flying cars is gaining serious traction. People are investing hundreds of millions of dollars in drone companies today, because they believe that they will be more efficient and better for the environment than the current system. And that's making people really nervous. A Pew Research Center survey in 2017 found that 11% of Americans support drones, while 34% favor some limits on them. But 54% disapprove of drones flying near residential areas, and they cite privacy and noise as their top concerns. If developers can address these concerns and build out a network of delivery drones that are quiet, safe, and efficient, well, then the sky's the limit. Like I'm just thinking if I can get a bed, a new bed delivered to my apartment via drone, I mean, it might make my neighbors nervous, but that could be amazing.