Amazon plans drone delivery to 500 US cities by year-end, promising 30-minute drop-offs for packages up to 5 pounds. The expansion targets suburban metro areas including Chicago and Atlanta.
Amazon said Wednesday it will expand its drone delivery operation to nearly 500 US cities by year-end, promising 30-minute drop-offs for packages up to 5 pounds. The plan targets suburban metro areas including Chicago, Atlanta, Cleveland and Boise, the company said in a release.
The move pits Amazon directly against Walmart, which already runs drone delivery from 75 stores and plans 270 locations by 2027 through its partnership with Wing, a division of Alphabet. Both retailers are betting faster delivery keeps shoppers loyal, even if the economics of drone drops remain unproven.
"It's still an experiment. It's still in test and learn mode," said Sucharita Kodali, a retail analyst at Forrester. She called the 500-city target aggressive but noted many of those may be small towns clustered near each other. "Launching in a town doesn't mean they are getting any meaningful sales."
Amazon has delivered hundreds of thousands of packages by drone this year from 11 sites across Arizona, Florida, Kansas, Louisiana, Michigan, Nebraska and Texas. Each drone covers about 175 square miles, launching from an Amazon warehouse. CEO Andy Jassy told shareholders in April the company expects to deliver half a billion packages by drone within the decade, with an aim of 30-minute delivery.
Drones face practical limits. They carry only one 5-pound package per trip. Tree cover, landscaping and inflatable pools complicate drop zones. Noise concerns and local regulatory approvals remain hurdles in each new community. The company is FAA-certified and has waivers to fly drones beyond the pilot's line of sight, though a proposed federal rule to expand beyond-visual-line-of-sight operations has not been finalized.
The service will be free for Prime members ordering more than $50 worth of goods. Smaller orders cost Prime members $2.99, while non-members pay $4.99. Kodali said drones may prove most useful for urgent lightweight deliveries like prescription medications.
Walmart declined to comment on Amazon's announcement because it came one day before the retailer's scheduled earnings report.
Amazon is also investing in smaller fulfillment centers closer to customers and expanding its truck fleet. The company did not disclose how many new drone launch sites it plans or the capital expenditure tied to the expansion.
"Prime Air now has a design that'll scale," Jassy wrote. "Plans to serve communities with 30 million customers by year-end."
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