Nearly a decade after announcing grand plans for 30-minute drone delivery of items up to 5 pounds, Amazon told CNBC it’s now completed just 100 deliveries in two small U.S. markets.
Compare that number with internal projections from January for 10,000 deliveries by the end of this year, according to a video address in early 2023. Days after Amazon set its target, a significant number of Prime Air workers were let go as part of the largest round of layoffs in company history.
Now, Amazon’s 2023 goals have changed, the company said, pointing to regulatory hurdles put in place by the Federal Aviation Administration.
“While the FAA broadened Prime Air’s authority to conduct drone deliveries to include sites in California and Texas, the phased process for expanding our service areas is taking longer than we anticipated,” said Av Zammit, an Amazon spokesperson.
CNBC went to Lockeford, California, a 4,000-person town and one of the two U.S. markets where the company’s drone program is operating. Amazon said it started drone deliveries there in December, but there was no apparent aerial activity at the former concrete manufacturing warehouse that now serves as the unit’s local hub.
“I would love to see the drones flying around. I can’t wait,” said Ken Thomas, who co-owns a nearby deli that’s served lunch to some Amazon employees. “I haven’t seen any yet.”
Thomas added, “One guy said they had 14 customers signed up, which seems kind of low to me.”
Amazon said thousands of people “have expressed interest” in the program and that the company is “working with each one of them to make this a reality.”
Company employees previously told CNBC that the drones are only delivering to two homes in Lockeford, located next door to each other less than a mile from the warehouse. The employees asked to remain anonymous because they weren’t authorized to speak on the matter.
Main Street of Lockeford, California, on April 14, 2023. The 4,000-person town is one of two small markets where Amazon started gradual drone deliveries in December 2022.
But where Amazon has stalled, other companies’ drone programs have seen greater traction, particularly those that started outside of the regulatory confines of the U.S.
CNBC visited Wing, a subsidiary of Google parent Alphabet, at a drone test facility in Hollister, California. At one point, there were 37 drones in the air at once making demo deliveries.
Wing CEO Adam Woodworth said it’s made 330,000 deliveries. While thousands of those have been for partners such as Walgreens in Virginia and Texas, the company primarily delivers in Australia, where it brings orders from DoorDash and the supermarket Coles to homes in more than 50 suburbs.
“The service area that we cover there is between 70,000 and 100,000 people and it’s a relatively sort of geographically constrained location,” Woodworth said. “If you look at metrics from last year, we were seeing on the order of about 1,000-plus deliveries a day to that sort of one snapshot of the planet.”
Wing CEO Adam Woodworth shows the Alphabet company’s delivery drone to CNBC’s Katie Tarasov on April 25, 2023, in Hollister, California.
CNBC also got a glimpse of Walmart drone deliveries in its home state of Arkansas, with partner Zipline, which recently announced its fixed-wing aircraft has made 600,000 commercial deliveries, largely of medical supplies in Africa. In March, Zipline unveiled a far different model that lowers a “droid” to the ground by a tether.
A growing list of companies, including Sweetgreen and nutrition retailer GNC, have signed up to deliver with the new drone when it’s scheduled to come online in 2024.
“We operate in three states: North Carolina, Arkansas and Utah,” said Zipline CEO Keller Rinaudo Cliffton. “For some of the families in those states that we serve day in and day out, not only is drone delivery a thing, not only is it possible, it’s also now boring.”
Brandey Oliver, a Zipline customer in Pea Ridge, Arkansas, said she likes the services because they’re secure.
“If we’re not here and we get a delivery, nobody has access to our backyard,” said Oliver, who lives about 10 miles from Walmart’s headquarters in Bentonville. “It really helps in emissions, and global warming has me worried. So I like it that no delivery cars are used.”
DroneUp is another Walmart partner with financial backing from the retailer. CEO Tom Walker said its drones have made more than 110,000 deliveries in the U.S. DroneUp cut some jobs this week, in a shift to focus more on consumer delivery and away from enterprise services such as construction and real estate monitoring.
“We have 34 locations operating in six states today, and we’re delivering in less than 30 minutes,” Walker said. “The routes are designed to minimize flight over people, minimize flight over moving vehicles, and it chooses the optimum route both from a safety standpoint, but from an efficiency standpoint.”
Walmart said it made more than 6,000 drone deliveries across seven states in 2022 with DroneUp, Zipline and a third partner, Flytrex.
‘Most complex airspace in the world’
Reese Mozer has been in the drone industry for 14 years and remembers when Amazon’s then-CEO Jeff Bezos first announced Prime Air drone delivery on CBS’ “60 Minutes” in December 2013.
“Those of us who were in the industry at that time could foresee many of the challenges that were coming to actually fulfill that vision,” said Mozer, now president of Ondas Holdings, which owns several drone companies such as Airobotics. “You know, delivering packages via drone is a very complicated problem…
Read More: Amazon’s 100 drone deliveries puts Prime Air behind Google and Walmart