Walmart grounding drone deliveries in three US states
American Walmart and drone partner DroneUp are ending drone delivery in the states of Arizona, Florida and Utah, because operations in these states have become unsustainable.
The two parties say they will now only focus on perfecting the airborne package delivery service in the Dallas-Fort Worth area.
According to a report from Axios, DroneUp said it was shuttering delivery by drone operations in eighteen Walmart delivery hubs in Phoenix, Arizona, Tampa in Florida and Salt Lake City, Utah; just two years after the three cities were part of a splashy rollout in that was described as the vanguard of drone delivery operation in the US.
The closures will cost the jobs of seventy employees, or about seventeen percent of DroneUp’s staff in the affected cities; and confine the company’s delivery service to only fifteen Walmart locations: eleven in Dallas, Texas, three near Walmart’s Bentonville, Arkansas headquarters and one in Virginia Beach, where DroneUp is based.
“We’re really focusing on automation, and a drone with higher payload capacity and longer range,” said DroneUp CEO Tom Walker, amid report that his company was coughing up $30 each time its drone completed a delivery mission.
The goal is to reduce that to $7.
“Now it’s time to focus on that scalable model.”
Earlier this year, DroneUp, which is partially owned by Walmart, unveiled a proprietary autonomous drone ecosystem that Walker says will revolutionise last-mile logistics.
The more advanced drone is reported to travel at speeds of 60 miles per hour, has a 30-mile range, and uses a claw-like grabber to lift packages up to ten pounds and store them safely inside its belly.
Following this latest development however, it is not clear whether this is an issue with the delivery operations themselves, or the modus operandi of the service provider.
Other drone logistics companies like Zipline and Wing look to be working well in cities; at least at the time of writing this report.
But it is true that instant drone delivery only makes economic sense if it can be done at scale, and right now Dallas is emerging as the capital of drone delivery in America, Zipline, Wing and DroneUp itself setting up scalable operations in the city.
“We are excited about the momentum and positive customer response we’ve experienced around drone delivery,” Walmart said in a statement.
“This service will continue to evolve as we learn more about customer preferences and drone capabilities. Our drone delivery program is still a pilot and by focusing our efforts in Dallas-Fort Worth, we can learn more about the potential to scale this innovative delivery option for Walmart’s customers.”
Said Walker; “If we achieve the delivery cost point that we’re targeting, then it will no longer be something that people want, it’ll be something that they demand.”
Walmart earlier this year announced plans to expand drone delivery to 1.8 million residents in the Dallas area, covering about 75 percent of the population.
In addition to DroneUp, the retailer partners with Wing and Zipline on drone deliveries in the Dallas-Fort Worth metro area and with Flytrex on deliveries in Fayetteville, North Carolina.
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