Battle for Dallas Skies Descends Into War of Words

DroneUp cuts markets, PuDu market share climbs, Tesla restaurant nears completion

Before we get to this week’s news, have you listened to our new podcast yet? Introducing The Courier: each week Jonah Bliss and Greg Lindsay will explore the hottest topics from the worlds of delivery, mobility, automation, and tech policy. Tune in for episode one, where guest Gary Chaglasyan discusses how he got into foodtech, plus PizzaBox AI’s new subscription features. Listen now on Spotify or Apple Podcasts.

DroneUp Descends on Dallas, Cuts Other Markets, Flytrex Responds

Things are getting heated in the drone delivery space, as Walmart and DroneUp end services at eighteen hubs across Tampa, Salt Lake City and Phoenix. As part of the cut back, DroneUp, which counts Walmart as a major investor, is also slashing its headcount by 17%. Going forward, the companies will maintain fifteen delivery hubs: one by DroneUp’s office in Virginia Beach, three near Walmart’s Bentonville HQ, and eleven in Dallas. Currently it costs DroneUp about $30 to make a delivery, but it’s looking to drive that down to $7 a pop, thanks both to a BVLOS waiver that seen pilots operate up to 40 drones per hour and a forthcoming new drone model that can travel 60 miles per hour and sports a 30 mile range.

DroneUp’s descent comes about a year and a half after it brought drone deliveries to Arizona and Florida, which came a year after first launching in Arkansas. Dallas’ permissive regulatory apparatus, combined with its endless low-density sprawl, has made the area a real powerhouse for aerial deliveries. Back in January, Walmart turned to Zipline and Alphabet’s Wing to expand its drone options in the DFW. Those two players have proven themselves to be real tech leaders, having also just scored FAA approval to operate beyond the visual line of sight (BVLOS) in the Dallas region, a major obstacle that’s been seen as a hindrance for viable commercial operations.

Flytrex, another drone operator with a Walmart partnership, looks eager to pick up any deliveries that DroneUp may be dropping. In an emailed statement, Flytrex CEO Yariv Bash said:

"The drone delivery industry is at a pivotal moment where the focus is shifting from regulatory approvals to achieving true commercial viability. Walmart's decision to halt DroneUp services highlights the need for a robust system that both meets regulatory standards and delivers on the promise of cost-effective and scalable operations. You can't deliver groceries in a Bentley - it's simply too expensive. The key to the industry's future success lies in creating solutions that are more affordable and efficient than existing alternatives."

PuDu Robotics Takes Market Share Lead

PuDu Robotics, maker of the popular BellaBot, which moves trays and goods around restaurant and retail interiors, has hit a major milestone. The company now claims the largest market share — 23% globally — of any commercial service robotics company. Frost & Sullivan reports that PuDu is more than twice as large as the next most dominant competitor, and projects that the overall market will hit $1.5 billion by 2030.

Chipotle CEO Decamps for Starbucks

Brian Niccols, CEO and Board Chairman of Chipotle, is headed to Starbucks, replacing Laxman Narasimhan as Chief Executive. The market took the news like a triple shot of espresso, with SBUX stock jumping 24.5% in response, a record single day gain that added $21.4 billion in market cap, undoing a year’s worth of price sliding. Chipotle investors were less thrilled with their loss — Niccols turned the company around after its bad e. coli scare in 2018, following an acclaimed stint at Taco Bell — CMG stock fell 7.5%. Chipotle COO Scott Boatwright will step in as the burrito bowl builder’s interim CEO.

Starbucks stock has been down 36% since Narasimhan took over from Howard Schultz, with sales continuing to fall in key markets like the U.S. and China. The company has been dinged for a number of shortcoming as of late: a tired menu, operational inefficiencies and falling foot traffic from non-rewards members. Its delivery / takeout business has been a mess as well, with mobile ordering impacting in-store wait times, and partnerships with the 3PDs taking too long to emerge, while interesting initiatives like in-house baristas at Gopuff MFCs tread water. Niccols tenure at Chipotle has seen him turn the brand into a tech leader, with digital sales accounting for over one third of revenue, and the company receiving acclaim for innovations like its Chipotlane and forthcoming Hyphen makeline.

To win over Niccols, Starbucks had to throw in more than just a $10 million signing bonus; it’s letting Niccols work remotely. Evidently, Niccols is a big booster of Southern California’s food and technology scene. When Chipotle lured him from Taco Bell’s Irvine headquarters, he in turn moved Chipotle’s head office to Newport Beach, a mere 10 miles away (and a tad swankier, we’ll add.) While Starbucks isn’t ready to shed its full Seattle heritage yet, it’s letting Niccols stay in SoCal, while tossing him the keys to the corporate jet.

Tesla Restaurant Nears Completion

We’ve been tracking the progress of Tesla’s first restaurant since we broke the news that it had begun construction back in September 2023. It’s been six and a half months since we last checked in, and eight and a half since the structure reached its second story. The restaurant is now fairly well defined, with a distinctive (and perhaps ungainly) flying saucer appearance. Towards the back left of the photo, you’ll note what looks to be the screen that drive-in movies will be project onto.

In Other News

Apple reportedly working on robotic arm with iPad attachment. Flytrex hits 100k deliveries. Impossible Foods opens restaurant concept in Chicago. Chinese robotaxi WeRide gets CPUC approval. Ikea adds to inventory drone fleet.