Alphabet Taps Brakes on Drone Project, Nixing Starbucks Partnershi

The latest Google drones have just started taking flight in the real world. But the team behind the technology is slowing down, trimming headcount and shelving initiatives as the experimental unit becomes the latest target of tightening budgets across parent company Alphabet Inc.

Project Wing, a unit of Alphabet’s X research lab, nixed a partnership with coffee giant Starbucks Corp., according to people familiar with the decision. Following the departure of project leader Dave Vos in October, the unit also froze hiring and began asking some staff to seek jobs elsewhere in the company, according to some of those people. They asked not to be identified speaking about private company moves.  sunray 800 hd se

The decisions are part of a broader Alphabet effort to rein in spending and try to turn more experimental projects from loss-making risky bets into real businesses. Drones are in a particularly knotty place. U.S. federal regulation does not yet allow for delivery, except in select test zones. However, Alphabet’s deceleration comes as other technology companies, including Amazon.com Inc., plow money into drone delivery.

“Project Wing has the potential to remove a big chunk of the friction in how physical things are moved around in the world,” a spokeswoman for X wrote in an e-mail. “What we’re doing now is developing the next phase of our technology, and as always are thinking in a very broad way about all the potential use cases for delivery by unmanned aerial systems.”

In August, Project Wing won approval for test flights at a U.S. site, part of a White House effort to encourage unmanned vehicle delivery. Then in September, Alphabetannounced a new foray: a partnership with Chipotle Mexican Grill Inc. to deliver food via drone at Virginia Tech.

Robotic burrito drop-offs are a far cry from Google’s initial aims. The unit first wanted to deploy drones to deliver health-care items, such as medicine and heart defibrillators. After those plans were scrapped, the unit moved to food and other perishables.

Alphabet was in advanced talks with Starbucks and had tested delivery with the coffee-chain operator, according to two people familiar with the plans. Those plans were nixed, largely over disagreements about the access to customer data that Alphabet wanted, according to a former X employee.

A Starbucks representative didn’t respond to a request for comment on Tuesday.

Similarly, the unit was in talks to provide suburban grocery delivery in Ireland, where drone rules are less stringent than in the U.S. Amazon’s Prime Air service, a competing effort to use unmanned vehicles, announced it was testing with the British governmentthis summer.

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