Walmart has decided to discontinue drone deliveries in Phoenix, AZ, Salt Lake City, UT, and Tampa, FL in collaboration with DroneUp due to the services not being sustainable in those locations, as reported by Axios. This decision comes after an initial announcement in 2022 that Walmart and DroneUp would be introducing drone delivery services in those states as part of a larger expansion plan.
Currently, the cost of using a drone for delivery is around $30, but DroneUp aims to reduce this cost to less than $7, according to DroneUp CEO Tom Walker in an interview with Axios.
As a result of this decision, DroneUp will be shutting down 18 Walmart delivery hubs in the affected cities, leading to a 17% reduction in DroneUp’s workforce, with 70 employees losing their jobs, as per Axios. Following these closures, there will only be 15 Walmart locations where customers can access DroneUp’s delivery services – 11 in Dallas, 3 near Walmart’s headquarters in Bentonville, Ark., and one in Virginia Beach.
Both Walmart and DroneUp have not yet responded to requests for comment regarding this development.
Aside from DroneUp, Walmart also collaborates with Alphabet’s Wing and Zipline for drone deliveries in the Dallas-Fort Worth metro area, as well as with Flytrex for deliveries in Fayetteville, North Carolina.
