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FAA Regulations on Drones and the Impact on Small Business

Many small businesses are anxiously awaiting the FAA’s incoming rules for drones and small unmanned aircraft systems. Some businesses are scared that the new rules will force them to abandon plans to enter the market, or force them to leave the market altogether. A survey conducted with small businesses showed that these small businesses feared these upcoming FAA regulations.

Unfortunately, many businesses are uninformed when it comes to the operations and use of small unmanned aircraft systems (sUAS) for commercial purposes according to FAA policies. Almost half of those businesses surveyed (44%) have the idea that they need an FAA Certificate of Authorization or Waiver. An estimated 30% think that the FAA is not in charge of regulating Class G air space and 25% have the impression that they can operate sUAS if they are allowed a 21.25 Restricted Category certificate.

In spite of all this lack of clarity, almost one half of businesses surveyed say they operate their sUAS in airspace. In fact, 64% of those businesses have been operating for more than two years. The fact of the matter is that there is chance for revenue in this market. For businesses, 13% said their business exceeded one million dollars.

The survey also showed that video and aerial photography dominated both future and current services at a rate of 41%. The next group is UAS technology and aircraft, coming in at 11%. Only about eight percent of those surveyed conveyed that they wanted to use their sUAS for farming and agriculture services. The largest group who are interested in using drones, the aerial photography group, also has the largest span in income ranging from zero to over one million dollars. The report also concluded that almost two-thirds of businesses are operating without commercial liability insurance for sUAS. One reason for this is the possible difficulty in acquiring insurance for operating an unmanned aircraft.

The use of sUAS is relatively new and the amount of users may be too small for insurance carriers to take notice. When it comes to regulations, most of those surveyed were in agreement that there was a need for rules. In fact, 90% of those surveyed, chose two regulations that were considered favorable for business. They are in agreement for operational guidelines for self-regulation and self-declaration of aircraft, general location, intent and use. All other regulations were deemed unfavorable. Another element that the survey agreed upon was the impact of unfavorable future regulations. Those surveyed agreed that types of FAA regulations on commercial operations would be unfavorable for their businesses. One example of unpopular regulations were requirements for pilot licenses. In fact, 61% of those that responded said that these types of regulations would prevent them from starting or expanding their current business operations.

The report concluded that the overall market for sUAS would essentially disintegrate if unfavorable regulations were enacted. All the positive elements of starting a business such as job creation, revenue and tax base creation would be impacted.


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