Drone Delivery, Small Step or Game Changing *

Thursday was a big day for drone delivery, as chicken chain El Pollo Loco and retail giant Walmart both announced new airborne initiatives.

The former said it will use drones from Tel Aviv-based Flytrex to deliver food to customers’ homes in Southern California this summer, becoming the first national restaurant chain to do so. The pilot doubles as a promotional opportunity (it will initially target rewards members and is accompanied by free regular delivery for a limited time), but the chain appears to be taking a serious look at the service. 

El Pollo Loco believes drones could reduce its delivery costs by up to 30%, a representative told RB. Combine that with the fact that drone companies promise faster service than traditional vehicles and you have an intriguing proposition for restaurants that have long complained about the high price of delivery.

Walmart, which has also used Flytrex for deliveries, on Friday said it had invested in drone company DroneUp in hopes of expanding the service, according to RB sister company Winsight Grocery Business.

“Conducting drone deliveries at scale is within reach,” Walmart U.S. President and CEO John Furner said in a statement, noting that the chain’s vast network of stores makes drone delivery a viable last-mile option. 

That said, drone delivery is still highly limited by federal rules. Flytrex in May got special approval from the FAA to deliver directly to people’s homes, for instance, but it is still seeking permission to fly drones beyond the line of sight of the pilot. 

One last data point to chew on: Drones are the fastest-growing segment in the transportation sector, with 1.7 million drones registered and more than 200,000 FAA-certified pilots as of December, according to the FAA.