Walmart has announced that it is terminating its contract with DroneUp, the drone logistics company it partnered with back in 2021.
The split also includes Walmart’s exit as an investor in the drone company, signaling a shift in the retail giant’s approach to drone-based delivery strategies.
The announcement came just weeks after DroneUp received Federal Aviation Administration (FAA) certification to expand its commercial operations, according to AccessWire. This development raised hopes for the future of the company. Despite this progress, Walmart confirmed that its partnership with DroneUp, which initially aimed to scale up drone deliveries to customers, has officially ended. DroneUp confirmed the split as well with Walmart in a recent statement.
Walmart, which first invested in DroneUp in 2021 after a successful trial using drones to deliver COVID-19 test kits, expressed optimism about the potential of drone deliveries. The partnership between Walmart and DroneUp launched its first deliveries in early 2022, with the companies billing it as a groundbreaking initiative to revolutionize how consumers receive their items. However, the venture faced challenges from the start, with high operational costs and various hurdles proving difficult to overcome, according to AXIOS.
By August 2023, DroneUp significantly scaled back its operations, halting drone deliveries in most markets and limiting the service to Dallas, per AXIOS. The company cited the unsustainable costs of the model at the time, and Walmart soon followed suit, deciding to pull back from the venture. […]
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