Amazon’s drone business can’t get off the ground as regulations, weak demand stymie progress
David Carbon, vice president of Prime Air at Amazon.com Inc., speaks during the Delivering the Future event at the Amazon Robotics Innovation Hub in Westborough, Massachusetts, US, on Thursday, Nov. 10, 2022.
Bloomberg | Bloomberg | Getty Images
In mid-January, Amazon’s drone delivery head David Carbon sat down for his weekly “AC/DC” video address to employees, where he gives the latest updates on Prime Air.
The acronym stands for A Coffee with David Carbon, and the event followed a very busy end to 2022. A decade after Prime Air’s launch, Amazon was starting drone deliveries in two small markets, bringing one of founder Jeff Bezos’ dreams closer to reality.
In the video, which was obtained by CNBC, Carbon told employees that Prime Air had recently kicked off durability and reliability (D&R) testing, a key federal regulatory requirement needed to prove Amazon’s drones can fly over people and towns.
“We started D&R and we’re into D&R as of the time of this filming by about 12 flights,” Carbon said. “So, really excited to get that behind us.”
However, there’s a cavernous gap between starting the process and finishing it, and employees could be forgiven for expressing skepticism.
Since at least last March, Carbon has been telling Prime Air staffers that D&R testing is underway, according to people who worked on the project and requested anonymity because they aren’t authorized to discuss it. He even had baseball caps made that said “D&R 2022” with the Prime Air logo on them.
But the Federal Aviation Administration didn’t provide clearance for testing until December, and the company began the campaign shortly after, in January of this year, Amazon said. Before a broader rollout, Prime Air must complete several hundred hours of flying without any incidents and then submit that data to the FAA, which oversees the approval process for commercial deliveries.
That all stands in the way of Prime Air’s expansion and its efforts to achieve Amazon’s wildly ambitious goal of whisking food, medicine and household products to shoppers’ doorsteps in 30 minutes or less.
Bezos predicted a decade ago that a fleet of Amazon drones would take to the skies in about five years. But as of now, drone delivery is restricted to two test markets — College Station, Texas, and Lockeford, California, a town of about 3,500 people located south of Sacramento.
Even in those hand-picked areas, operations have been hamstrung by FAA restrictions that prohibit the service from flying over people or roads, according to government records. That comes after years of challenges with crashes, missed deadlines and high turnover.
So, while Prime Air has signed up about 1,400 customers for the service between the two sites, it can only deliver to a handful of homes, three former employees said. In all, CNBC spoke to seven current and former Prime Air employees who said continued friction between Amazon and the FAA has slowed progress in getting drone delivery off the ground. They asked to remain anonymous because they weren’t authorized to speak on the matter.
Amazon told CNBC that thousands of residents have expressed interest in its drone-delivery service. The company said it’s making deliveries to a limited number of customers, with plans to expand over time.
CEO Andy Jassy, who succeeded Bezos in mid-2021, hasn’t talked a lot about Prime Air in public. He’s got much bigger problems to solve as Amazon navigates a period of deep cost cuts while trying to reaccelerate its business after revenue growth in 2022 was the slowest in the company’s quarter century on the public market.
But Jassy also wants to maintain a culture that’s thrived on big bets and risk-taking. His leadership circle, known as the S-team had previously set a goal of beginning drone deliveries in two locations by the end of 2022, according to two employees.
In January, a significant number of Prime Air workers were let go as part of the largest round of layoffs in Amazon’s history, totaling more than 18,000 people, CNBC previously reported. Prime Air sites in Lockeford, College Station and Pendleton, Oregon, were all hit by the job cuts, further straining operations.
The Lockeford site is now down to one pilot certified to operate commercial flights, a former employee said, so days after the layoffs were announced, Amazon flew a staffer there from College Station to help with deliveries.
Not that there’s much activity. Employees told CNBC that the Lockeford location can only deliver to two homes, which are located next door to one another and sit less than a mile from Amazon’s facility. Some details of the FAA restrictions were previously reported by The Information and Business Insider.
Employees who remain after the layoffs told CNBC that morale in the division has continued to sink since the cuts. With more work to do and less clarity on their parent company’s ongoing commitment to the mission, some are saying that they and their colleagues have started searching for jobs.
Maria Boschetti, an Amazon spokesperson, said in a statement that the layoffs and delays experienced by Prime Air haven’t affected its long-term plans for deliveries. The company is staffed to meet all applicable FAA requirements for safe operations and safety standards, she said.
“We’re as excited about it now as we were 10 years ago — but hard things can take time, this is a highly regulated industry, and we’re not immune to changes in the macro environment,” Boschetti said. “We continue to work closely with the FAA, and have a robust testing program and a team of hundreds in place who will continue to meet all regulatory requirements as we move forward and safely bring this service to more customers in more communities.”
Irrational confidence
Prime Air’s FAA problem is not a new phenomenon, and the company has long been working to try to maneuver through restrictions that limit its flying capabilities.
Of particular note was an effort in late 2021 to get a key rule changed. On Nov. 29 of that year, Sean Cassidy, Prime Air’s director of safety, flight operations and regulatory affairs, wrote to the FAA seeking relief from an order that dictates the operational conditions for Amazon’s drones, according to government filings.
Cassidy said in the letter that Amazon’s new MK27-2 drone had several safety upgrades from the earlier model, the MK27, that rendered many of the “conditions and limitations” set by the FAA obsolete. Among the restrictions Amazon sought to remove was a provision prohibiting Prime Air from flying its drones nearby or over people, roads and structures.
A year later, in November 2022, the FAA declined Amazon’s request. The agency said Amazon did not provide sufficient data to show that the MK27-2 could operate safely under those circumstances.
“Full durability and reliability parameters have not been established to permit” flying over or near people, the FAA said.
An Amazon drone operator loads the single shoebox-size box that can fit inside its MK27-2 Prime Air drone
Amazon
It was a surprising setback for Amazon. In early 2022, the company was so confident the FAA would soon lift the restrictions that, according to five employees, it paid for around three dozen staffers to temporarily live in hotels and Airbnbs in the area of Pendleton, a small town in rural eastern Oregon that’s about a three-hour drive from Portland.
Upon lifting of the restrictions, Amazon intended to move the workers to Lockeford and College Station, with the goal of beginning deliveries in the summer of 2022, the employees said.
But by October, the Pendleton crew was still “living out of their suitcases,” one employee said, while the company paid for their room and board.
The following month, Prime Air moved the employees to their respective sites, just in time for the FAA to deny Amazon’s effort for a reprieve. But the company opted to proceed anyway. On Christmas Eve, Carbon announced in a LinkedIn post that Prime Air had made its first deliveries in College Station and Lockeford.
“These are careful first steps that we will turn into giant leaps for our customers over the next number of years,” Carbon wrote.
Boschetti said Prime Air’s delivery team received “extensive training” at the Pendleton flight test facility before they were sent to delivery locations.
Some staffers viewed the launch as a rushed effort and questioned how the service would be able to operate fully without the ability to fly over roads or cars, former employees said.
What’s more, demand from Prime Air’s tiny customer base isn’t exactly soaring. At the Lockeford site, employees have to regularly contact the two households eligible for delivery to remind them to place orders, and Amazon incentivizes them with gift cards, according to two people familiar with the situation.
Meanwhile, Amazon is working on development of its next-generation Prime Air drone called the MK30, and known internally as CX-3. At an event in Boston in November, Carbon unveiled a mockup of the unmanned aircraft, which is supposed to be lighter and quieter than the MK27-2.
As of January, Carbon was still expressing optimism at his weekly AC/DC chats. He said Prime Air has a target to make of 10,000 deliveries this year between its two test sites, even with the D&R campaign unfinished and the FAA limitations firmly in place.
Carbon acknowledged that Prime Air “is not immune to the costs savings” that Jassy is implementing, but he sounded undeterred.
“This year is going to be a big year,” Carbon said. “We’ve got lots going on.”
The MK30, expected to launch in 2024, will have to go through the same regulatory process, including a separate D&R campaign, as well as so-called type certification, an even more rigorous FAA benchmark that allows a company to produce drones at scale.
It’s not a distinction the FAA is quick to hand out. Of all drone makers vying to deliver commercially, only one has received type certification — a startup called Matternet.
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Partiful’s CEO, Shreya Murthy, and CTO, Joy Tao
Courtesy: Partiful
When Shreya Murthy and Joy Tao decided to launch a party-planning startup in 2020, they settled on a business goal of “bringing people together in person.”
The Covid-19 pandemic demanded the exact opposite.
Despite the challenge of the pandemic, Partiful survived, and five years later, the New York startup is now used by millions of people to plan events such as birthday parties, housewarmings and weddings.
The app’s a favorite of those ages 20 to 30, and it’s added 2 million new users since January, Partiful CEO Murthy told CNBC. The company has never revealed its exact base of monthly users.
Partiful drew attention on social media after Apple, known for replicating features from popular apps on the iPhone, launched its own event-planning service in February, and the startup posted a joke about “copycats” on its X account.
Of course, Partiful isn’t the first party-planning app. It competes against not only Apple Invites, but also Eventbrite, Evite, Punchbowl and others.
Each service differs slightly in its target markets and features. Evite, for example, uses a “freemium” model, where certain invitation designs and other features are paywalled. Eventbrite is often used to promote and sell admission to large public events.
What sets Partiful apart from its competitors — and appeals to its Gen Z user base — is its often humorous, casual designs, some of which are created by Partiful’s in-house designers.
“Friend invited me to a gathering that doesn’t have a Partiful….feeling lost, confused, unprepared…much like when I (Gen Z) receive a phone call out of the blue,” X user Athena Kan posted in August.
For the first quarter of 2025, Partiful averaged 500,000 monthly active users, up 400% year over year, with 9 out of 10 users on the app based in the U.S., according to estimates provided to CNBC by Sensor Tower, a market research firm. That compares with Eventbrite’s 4.4 million monthly active users, which is up 2% year over year, and Punchbowl with approximately 85,000 monthly users, which is down about 2% compared to a year ago. A spokesperson for Evite told CNBC that the service saw more than 20 million monthly active users for the first quarter of 2025.
It’s unclear how many people still use Facebook’s once-popular event-planning feature Facebook Events. Facebook’s parent company, Meta, shut down the standalone app.
Sample invitations from the Partiful app
Source: Partiful
Bringing people together in real life
Murthy and Tao both went to Princeton University and worked at Palantir Technologies at the same time, but they didn’t meet until they were introduced later by a mutual friend. Both were looking to move to the consumer-facing side of tech.
Tao, then a software engineer at Meta, wanted to leave the company to focus on products that were more relatable to daily life, and said that the social media company’s goal of keeping users engaged on their apps sometimes can create “perverse incentives.”
“For me, driving more people to spend more time staring at their phone, staring at this endless feed of content, wasn’t super motivating, wasn’t super meaningful to me personally,” said Tao, Partiful’s tech chief and a self-described “avid party planner.”
Meta declined to comment.
Tao and Murthy went through a sort of “dating period” where they asked each other what they thought leading a startup together could look like. Among the voids they identified was how intimate social events, such as birthday parties where a host would be likely to see the attendees again, were still planned on text chains that made it difficult to track, communicate or plan an ideal event time with guests.
“If you’re not sure when people are free, that’s a really annoying problem,” Murthy said.
She and Tao took the leap.
With few in-person events happening during the 2020 lockdowns, Partiful’s engineering team focused on building the platform’s text message-based infrastructure so that the service could be used by both iPhone and Android users.
Partiful’s team, which has now grown to 25, operates out of downtown Brooklyn. The service is no longer limited to text messages and its website. The company launched apps for the iPhone and Android devices in 2023 and 2024, respectively, and Partiful now serves as a one-stop destination for organizing the different phases of planning and hosting a party. The company has reportedly raised $20 million in a funding round led by Andreessen Horowitz.
Speaking Gen Z’s language
What makes Partiful fun for users is how customizable an invite can be.
Hosts can create a free birthday invite with a lime-green parody cover of Charli XCX’s “brat” album, for example, or plan a girls’ night out with a cover photo of Shrek in sunglasses. They can track “yes,” “no” or “maybe” RSVPs under a portrait of Martha Stewart and Snoop Dogg, and invited guests can use a “boop” feature to send random emojis rather than a direct message to each other.
Party planners can also send out uniform text blasts to the group before and after the event and manage an in-app photo album for uploading memories.
Partiful is available for anyone to use, but Murthy said the company sees the most need for the service among young users in the “postgrad” period of life. That’s a stage where people might be moving to new cities and away from their established college friend groups.
“You’re starting your adult life and have to not only figure out, ‘How do I rent an apartment? How do I work a new job? How do I exist in this new version of myself?'” Murthy said. “On top of that, you’re also having to rebuild your entire social circle.”
For the hosts and partiers in its user base, Partiful has become part of their social routine, and it has continued to gain traction online. The company told CNBC that over 60% of its active app users check Partiful every week.
As for Apple, Partiful isn’t sweating its new rival just yet.
Apple Invites requires that users have an iCloud+ subscription to create events, though it’s free to RSVP if a guest doesn’t have an Apple account. That service starts at 99 cents a month in the United States. Apple did not respond to a request for comment.
Partiful is free, at least for now.
Like many other tech companies that rely on distribution services such as Apple’s App Store, Partiful has a nuanced relationship with its much-larger counterpart. Partiful could lose some users to Apple, but it can also benefit from promotion by the app distributor.
That’s what happened in 2024, when Partiful was named a finalist for Apple’s App Store Awards for Cultural Impact, and won Google Play’s “Best App of 2024.” The app remained an “editor’s choice” pick on the App Store as of publication.
For now, Partiful remains confident.
“We haven’t really seen any users that have been leaving Partiful for Apple Invites,” Murthy said.
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An attendee wearing a Super Mario costume uses a Nintendo Switch 2 game console while playing a video game during the Nintendo Switch 2 Experience at the ExCeL London international exhibition and convention centre in London, Britain, April 11, 2025.
Isabel Infantes | Reuters
Nintendo on Friday announced that retail preorder for its Nintendo Switch 2 gaming system will begin on April 24 starting at $449.99.
Preorders for the hotly anticipated console were initially slated for April 9, but Nintendo delayed the date to assess the impact of the far-reaching, aggressive “reciprocal” tariffs that President Donald Trump announced earlier this month.
Most electronics companies, including Nintendo, manufacture their products in Asia. Nintendo’s Switch 1 consoles were made in China and Vietnam, Reuters reported in 2019. Trump has imposed a 145% tariff rate on China and a 10% rate on Vietnam. The latter is down from 46%, after he instituted a 90-day pause to allow for negotiations.
Nintendo said Friday that the Switch 2 will cost $449.99 in the U.S., which is the same price the company first announced on April 2.
“We apologize for the retail pre-order delay, and hope this reduces some of the uncertainty our consumers may be experiencing,” Nintendo said in a statement. “We thank our customers for their patience, and we share their excitement to experience Nintendo Switch 2 starting June 5, 2025.”
The Nintendo Switch 2 and “Mario Kart World“ bundle will cost $499.99, the digital version “Mario Kart World” will cost $79.99 and the digital version of “Donkey Kong Bananza” will cost $69.99, Nintendo said. All of those prices remain unchanged from the company’s initial announcement.
However, accessories for the Nintendo Switch 2 will “experience price adjustments,” the company said, and other future changes in costs are possible for “any Nintendo product.”
It will cost gamers $10 more to by the dock set, $1 more to buy the controller strap and $5 more to buy most other accessories, for instance.
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