Walmart has announced that its drone delivery service, in partnership with DroneUp, is ceasing operations in three cities: Phoenix, Salt Lake City, and Tampa. The retail giant began testing drone delivery services in 2022 and has been expanding its coverage to more cities since then.
CEO of DroneUp, Tom Walker, noted that the closure of drone delivery services in three states provided valuable lessons for the company, particularly in understanding customer demand. However, the company faced challenges due to a market size that was too small, leading to unsustainable business operations. Currently, the focus for the company lies in developing an autonomous system for drones to handle large volume and long-distance deliveries. This necessitates operating in cities with scalable markets, such as Dallas-Fort Worth, where DroneUp already covers 75% of the area.
The latest drone delivery technology from DroneUp can cover distances of up to 30 miles, with a speed of 60 miles per hour and a maximum payload of 10 pounds. Despite these capabilities, the cost of drone delivery remains a challenge compared to traditional delivery methods by Walmart’s vehicles. The company aims to narrow the cost gap and leverage the instant speed advantage of drone deliveries.
Source: Axios
TLDR: Walmart and DroneUp are discontinuing drone delivery services in Phoenix, Salt Lake City, and Tampa, citing the need for larger markets and a focus on developing autonomous drone systems.
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