Drone-delivered chili isn't the future

Amazon fails aerial economics. [Bloomberg]( This is Bloomberg Opinion Today, a 12-foot drop of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - Drones don’t help [Amazon’s case](. - China’s winning [the EV race](. - Don’t believe [a random face](. - A wealthy life requires [this pace](. Nobody Wants Drone Chili If Kevin can’t carry the chili, drones don’t have much promise, either. Credit: The Office Amazon CEO Andy Jassy released his [annual letter]( to shareholders this morning. He clocked in at a modest 5,448 words — essentially a children’s board book compared to Jamie Dimon’s 28,000-word tome, but still about five times longer than your run-of-the-mill Bloomberg Opinion newsletter. “When done right, a shareholder letter lets a CEO’s personality shine through — in a highly lawyered and edited way,” Beth Kowitt [writes](. But in Jassy’s case, he might end up looking like [a fool](. One of his big bets in 2024 is “[Prime Air](,” Amazon’s new-wave drone delivery service that he says will eventually allow the e-commerce company to deliver packages to customers in less than an hour. While there’s certainly a need to fulfill here — human laziness has [no bounds](! — Leticia Miranda says there [are a few problems]( with the methodology: [Amazon’s drones]( can only carry orders that weigh up to five pounds, and items can’t be too fragile because they need to survive a 12-foot drop … A 2023 McKinsey study [estimates]( that a single-package drone delivery costs a company about $13.50, which is more expensive than delivery via an electric or gas vehicle making just one delivery. For drones to make a company money, a single operator will have to manage as many as 20 drones at one time. Twenty drones!!! Consider, for a moment, what that might mean for your town. Wendy’s and DoorDash are [currently testing]( a drone program in Christiansburg, Virginia, that can deliver Baconators, [Frosty](, french fries and even chili in “30 minutes or less.” But do we really want 20 drones whizzing around at 60 mph carrying [CHILI]( of all things? I can hear the EMS radio dispatcher now: “Unit 5, Unit 5, we have a report of a vehicle with obstructed vision due to an aerial spillage of Wendy’s chili on the windshield. Respond to the intersection of Main and Elm.” Not to mention, drones are loud! This [2021 study]( described them as being “substantially more annoying” than your average airplane or traffic jam. In the future, we’ll still need lots and lots of humans to deliver stuff. But if this chart from Justin Fox is any measure, it’s *not* looking like the US working-age population is up to the task: Thank goodness immigration has been able to fill the labor vacuum: “According the BLS, all the increase in employment in the US since February 2020 — the month before the Covid-19 pandemic partially shut down the US economy — has been among foreign-born workers,” he [writes]( (free read). Justin says the influx of immigration [enabled]( the infamous soft landing that kept [most economists]( up at night in the aftermath of the pandemic. “Without immigration, the US working-age population would be shrinking, and this seems likely to remain the case for the rest of the decade. Immigrants are taking all the jobs because, on net, no one else is available,” he writes. Of course, the swell of foreign-born workers is not without its caveats: “Letting millions of people cross the border with Mexico illegally and then apply for asylum (which allows them to apply for work permits after a [150-day wait](, with arrivals from a few countries [able to skip the line]() is not exactly the fairest or most efficient way to fill gaps in the US labor supply.” As for the delivery services we rely on so much, Leticia says companies would be better off spending their drone money on electric vehicles. I bet that’s a less messy way to deliver chili, at least! Hot Wheels While we’re on the topic of electric vehicles, what if we could kill two birds with one stone here? By encouraging Walmart and Amazon to shell out on EVs, we’d avoid aerial chili incidents and catch up with China. They’re way ahead of us in the Great Global EV Race, but hey, we love [an underdog](: You’d be forgiven if this chart came as a surprise to you, considering how much precious air we waste discussing the ever-changing antics of Elon Musk. But “Tesla’s gigantic valuation these days has more to do with [visions of robotaxis]( rather than EV leadership,” Liam Denning [writes]( (free read). Not only does China account for 60% of EV sales worldwide, it has a chokehold on the lithium-ion battery supply chain as well. “None of that happened by accident,” Liam notes. “As the 2000s dawned, roughly a century into the automobile age, Beijing correctly deduced that building a world-class export industry based around the internal combustion engine — displacing incumbents from the US, Germany, Japan and elsewhere — was an unlikely prospect. In 2001, Beijing launched an R&D program to develop batteries, motors and other EV-related technologies.” Now, the US is stuck playing catch-up against the looming backdrop of climate change. Not helping matters is the enduring American ideal of truck ownership, ingrained from the moment a two-year-old looks at the pile of Hot Wheels and opts for the Chevy Silverado over the Nissan Leaf (yes, such a thing [exists](). Thanks to a generation of relatively cheap, un-carbon-taxed gasoline, some families have grown all too comfortable with the three SUVs parked inside the six-car garage of their McMansion. “Such [beasts are hard to electrify](, requiring big expensive batteries to combat range anxiety,” he writes. Exhibit A: Ford’s F-150 Lightning pickup truck, which experienced a [halt]( earlier this year over a mysterious quality issue. Now, the automaker is slashing prices by as much as 7.5%. “Ford has said it expects to lose as much as [$5.5 billion]( on EVs this year and is putting a renewed emphasis on gas-fueled models such as the [Bronco]( sport-utility vehicle,” Bloomberg News’s Keith Naughton [writes](. One step forward, 5.5 billion steps back, I suppose. Bonus Climate Reading: - Free read: A historic new ruling by [the European Court of Human Rights]( will force Switzerland and others to do better on environmental goals. — Lara Williams - Brace for unstoppable momentum in [green-power investment]( as central banks move toward cutting rates. — David Fickling Telltale Charts While baby boomers are busy [breaking records]( for the cruise ship industry, Gen Zers and millennials are out here looking like [Oliver Twist]( (but if he had student debt, no path to home ownership and parents living in Boca Raton). Lionel Laurent [says]( it might be time to adopt a pro-youth playbook for the future: “Social spending is still geared toward the retirees and boomers who were most protected during the pandemic and who have the most wealth,” he writes. “At a time when extra military spending is rekindling the ‘guns or butter’ question — namely, at what point will governments have to cut social spending to fund defense — we should ask again whether all generations are ready to make sacrifices.” How many women are choosing their birth control based on a random TikTok video they saw? [According to]( Lisa Jarvis, “the twin forces of birth control-related misinformation, often from women sharing their personal experiences, and disinformation, typically posted by [right-wing]( [activists]( hiding their true agendas,” are influencing society’s views of contraception. The trend should be a wake-up call for doctors, she argues: “Women clearly feel their concerns aren’t being taken seriously by the medical establishment, and they are clamoring for more nuance in conversations about birth control.” [Do the Math]( A whopping $2.2 million. That’s how much a lot of people think they need to be wealthy. It’s a big number, but here’s the dirty, little secret: It’s [possible to get there]( by age 65 – in today’s dollars! – if you save and invest $10,000 in the stock market every year beginning at age 25. That’s less than half the maximum 401k contribution for 2024. — Nir Kaissar Further Reading Free read: Can Biden fix his [Gaza mistake]( by November’s election? One can hope. — Francis Wilkinson US government debt is on an [unsustainable path](. Ignoring the projections is a big mistake. — Bloomberg’s editorial board My brilliant plan to see Lionel Messi play a match in Miami failed, But [I still scored big](. — Juan Pablo Spinetto By threatening to [ban Biden]( from the ballot, Ohio and Alabama are playing a dangerously partisan game. — Patricia Lopez Former president Jacob Zuma is back on [South Africa’s ballot](. That spells trouble for the country. — Justice Malala The arms race between financial cops and robbers is heating up, [raising the cost]( for banks. — Marc Rubinstein UBS faces [heightened demands]( in Switzerland after the whole Credit Suisse disaster. — Paul J. Davies Why did Angela Rayner’s odds of becoming Labour’s next leader halve in one week? [Her taxes](. — Merryn Somerset Webb ICYMI Three words, five syllables and an unknown amount of securities fraud: [MATT LEVINE PODCAST](!!! NFL star O.J. Simpson, acquitted of double murder, [died at 76](. If you didn’t get into an Ivy, [a public school]( is the best investment. Harvard [announced its return]( to required standardized testing. Taylor Swift songs [are back on TikTok](. Kickers When the [fashion police]( is the police. How Gen Z took over [incel slang](. An astrology influencer [was accused]( of killing her family. The Senate basement [shrimp situation]( is bleak. Notes: Please actual jambalaya and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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