DroneUp refocuses on D/FW operations as part of strategic realignment with Walmart

By Jim Magill

DroneUp had announced that it would discontinue its drone delivery service in partnership with Walmart in three states. The company will instead focus on flights in the Dallas/Fort Worth metropolitan area, where the economic conditions are more favorable for growth, a company spokesperson told DroneLife.

“For DroneUp, factors such as strong state government support, high customer density, favorable weather and terrain, collaborative opportunities with other industry players, and a central location that provides easy access from almost anywhere in the U.S. are critical to our operations in Dallas,” said John Vernon, DroneUp’s chief technology officer, in a statement.

Earlier this month, DroneUp CEO Tom Walker told Axios that the drone delivery service would close 18 Walmart delivery centers in Phoenix, Salt Lake City and Tampa. The reorganization will result in the layoff of about 70 employees, or about 17% of DroneUp’s total workforce, Walker said.

Vernon said the company’s strategy to focus on the D/FW space would allow it to develop larger capacity hubs that could handle higher delivery volumes.

“Since launching these hubs in 2022, we have focused on learning more about consumer and community adoption, ensuring efficient operations and building a solid safety record,” he said. “By focusing on key markets, we can better refine our technology and grow more efficiently.”

DroneUp recently announced that the company has reached a new industry milestone with the ability to make 500 deliveries per day.

Vernon said the operator’s ultimate goal is to make drone deliveries more economical by putting them on par with other instant delivery methods like DoorDash or Uber Eats.

“DroneUp already offers the qualitative benefits of faster delivery time (without selection and packaging), allowing hot (or colder) food without having to worry about tampering during delivery,” he said.

Walker said DroneUp currently pays about $30 to deliver a package via drone. The company’s goal is to reduce the cost to under $7, which would put UAS delivery on par with ground-based delivery methods and make delivery significantly faster.

DroneUp currently operates 11 Walmart locations in the DFW area, Dallas, Plano, Murphy, Richardson, Mesquite, Rowlett, Colony and three locations in Garland.

The decision to focus operations on the D/FW region reflects a change in Walmart’s strategy for expanding drone delivery.

Last January, Walmart announced plans to expand its drone delivery service in the D/FW region in partnership with DroneUp, as well as Wing and Zipline, to cover 75% of households in the region.

In May, the retail giant announced it would expand its DroneUp delivery network to 34 locations in six states by the end of the year, potentially reaching four million U.S. households and delivering over a million packages annually by drone.

However, a Walmart spokesperson said in a recent statement that the retailer’s current strategy is to focus on “saturating” the DFW drone delivery market to figure out what large-scale drone deliveries might look like.

The spokesperson said Walmart and Wing recently opened two new drone delivery locations in the D/FW region as part of their expansion plans announced in January. Zipline, which is also part of the expansion plans, will begin operations in the DFW area in the coming months.

These Wing hubs and the future Zipline locations will complement the 11 hubs DroneUp currently operates in the DFW area. In addition, DroneUp will continue to operate from three Walmart stores in Arkansas and one in Virginia, the spokesperson said.

Vernon pointed to the development of the D/FW UAS Traffic Management (UTM) initiative as a key factor in the D/FW area becoming the center of drone delivery in the United States.

Last month, the FAA announced that it was allowing drone flights without a visual observer by both Zipline and Wing following the successful implementation of the UTM system, the first approval for BVLOS operations by more than one operator flying in the same airspace.

DroneUp, Vernon said, was one of the first architects responsible for developing the UTM system in the region.

“We have been instrumental in moving UTM from controlled test environments to practical, real-world applications,” he said. “From the beginning, DroneUp was one of the few industry leaders to actively define eligibility requirements and lead the process.”

Jim Magill is a Houston-based writer with nearly a quarter century of experience covering technical and economic developments in the oil and gas industry. After retiring as senior editor at S&P Global Platts in December 2019, Jim began writing about emerging technologies such as artificial intelligence, robots and drones and their contribution to our society. In addition to DroneLife, Jim is a contributor to Forbes.com and his work has appeared in the Houston Chronicle, US News & World Report and Unmanned Systems, a publication of the Association for Unmanned Vehicle Systems International.

Miriam McNabb is Editor-in-Chief of DRONELIFE and CEO of JobForDrones, a marketplace for professional drone services. She is a fascinated observer of the emerging drone industry and the regulatory environment for drones. Miriam has written over 3,000 articles on the subject of commercial drones and is an international speaker and recognized figure in the industry. Miriam has a degree from the University of Chicago and over 20 years of experience in high-tech sales and marketing for new technologies.
For advice or texts about the drone industry, send an email to Miriam.

Twitter:@spaldingbarker

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