Walmart Inc. of Bentonville on Tuesday announced plans to expand its DroneUp delivery network to 34 sites across six states by the end of the year.
The retail giant said the expanded network will have the potential to reach 4 million U.S. households in Arizona, Arkansas, Florida, Texas, Utah and Virginia.
The Virginia-based DroneUp said two of the new sites will be in Arkansas, with one in Rogers and in a yet to be disclosed location in northwest Arkansas. It already operates sites in Bentonville and Farmington.
The company, which has an office in Bentonville, expects to employ 650 people nationwide by the end of the year. CEO Tom Walker told Arkansas Business by Zoom recently that the company had about 200 employees and had already created approximately 60 jobs in the state. Approximately 40% of the new jobs will be in Virginia, he noted.
Walker said a typical shift at a delivery hub requires four people: the pilot operating the drone; someone who is observes the flight to ensure safety (DroneUp has had no reportable incidents after 100,000-plus flights); someone who loads packages on the drone, and a backup pilot in case there is a need to launch a second drone in response to demand or a need for more capacity.
The expanded network will give Walmart the ability to make 1 million aerial deliveries in a year, the company said in a news release. More than 30,000 items will be available for delivery in as little as 30 minutes. Orders can be up to 10 pounds.
Walker said the average delivery with its four-armed drones — constructed, designed and programmed in the United States — is 27 minutes. Though he wouldn’t share how much the drones cost, he said, “You could buy a low-end Tesla for what you would spend on one of our drones.”
On the delivery times, Walker said, “The interesting part is, of that 27 minutes, about 17 minutes so that is getting the product out of the store and on the drone. The actual delivery time, once we have the package on the drone, is anywhere between six and eight minutes. … and it's all done autonomously. So the pilots aren't really having to do anything except push a button.” He added that DroneUp is aiming to shave more time off to achieve 15-minute deliveries by this time next year.
Walker also said DroneUp recently began delivering lunch from restaurants and is looking to deliver over-the-counter as well as prescription medications in the coming months.
The expansion with Walmart comes after months of drone operations and hundreds of deliveries in northwest Arkansas. DroneUp began offering delivery in the region in November. Walmart said it first thought the service would be used mostly for emergency items, but customers have used it more for convenience. The top-selling item at one of its current drone hubs is Hamburger Helper.
Walmart said that as its drone service grows, it will offer aerial solutions for industries including insurance, emergency response and real estate. One example it provided was using DroneUp to monitor progress at construction sites.
"Not only will the added revenue help offset the cost of delivery, but it also serves the entire drone industry by gathering more flight data as we work together to expand drone operations in a safe and regulated way," the release states.
Walmart announced last June that it had invested in DroneUp, one of three drone companies it has partnered with to develop a scalable last-mile delivery system. It also has partnerships with Zipline International Inc. and the Israeli startup Flytrex.
“It's been amazing, the acceptance … We were anticipating some pushback whether it was due to privacy issues or other issues,” DroneUp’s Walker said. He said the company has someone observing each flight for safety, but its drones don’t record anything as they deliver goods and they’re also quiet.
“The biggest issue we have is we can't deliver it to everybody that wants delivery yet because we just don't have enough hubs open, enough range to get to everybody.”
He said people even pull up to the company’s existing hubs in the region every few weeks to ask when delivery by drone will be available to them. Because of current FAA regulations, the company’s range is a radius of 1.5 miles from each hub.
But Walker said DroneUp is advocating for and hoping to increase its range to 10 miles because 90% of the U.S. population lives within 10 miles of a Walmart. So partnering with the retailer comes with a strategic, long-term advantage for DroneUp, he said.
Walker also said the FAA hasn’t increased the range in the past few years because the agency feels there has been no need to, that drone delivery isn’t yet a scalable, viable alternative to traditional delivery methods. “The relationship between us and Walmart has given us the opportunity to prove that wrong,” Walker said.
He also said the company is grateful that Arkansas is so committed to the emerging mobility industry, and “it doesn’t hurt” that several Walton family members are committed to advancing aviation.
