Walmart Inc., No. 3 in the Internet Retailer 2018 Top 500, is testing a grocery delivery service that uses independent drivers to get groceries from their stores to customers’ homes.
The new pilot program, called Spark Delivery, launched Wednesday. Spark uses drivers who contract with Delivery Drivers Inc. (DDI). As the administrator of the program, DDI manages recruiting, screening and background checks, payment, accounting and other services for drivers.
Walmart says Spark is now available in Nashville and New Orleans. The retailer plans to roll it out to a few more metro areas this year.
Walmart says the pilot program uses an in-house platform. Drivers use an app to sign up for windows of time that work best for them. Drivers also use the platform to get order details, navigation assistance and other help. Bringg, a delivery logistics technology platform, powers some components of Spark.
Services like Spark—referred to as crowd-sourced delivery—use an Uber-style process to connect with and manage drivers. But, instead of picking up passengers, Spark drivers pick up and deliver grocery orders.
Walmart’s Spark service is similar to Amazon Flex, run by Amazon.com Inc. (No. 1 in the Top 500). Flex drivers deliver merchandise using their own vehicles and can earn $18-$25 an hour, according to Amazon. Flex is currently available only in Oklahoma and the New Orleans area.
A Walmart spokeswoman says its Spark drivers are paid by DDI and earn a fee for each job, along with possible gratuities from customers. Depending on the number of orders delivered, a driver’s pay can exceed $20 an hour, she says.
By the end of 2018, Walmart says it will offer grocery delivery to 100 metro areas, covering 40% of U.S. households. Today, it offers the service in nearly 50 markets including Atlanta, Chicago, Denver, Miami and Seattle. To reach 100 markets, Walmart is working with third-party delivery providers including Postmates Inc. and DoorDash Inc.
Walmart also offers in-store pickup of online orders at about 1,800 stores and says that will increase to 2,100 by the end of the year. Walmart, which has more than 5,000 stores and membership clubs nationwide. employs more than 25,000 personal shoppers, up from 18,000 earlier this year, in its online grocery operations. Those employees complete a three-week training program to learn how to select the freshest produce and the best cuts of meat.
In July, Walmart teamed up with Waymo, the autonomous vehicle arm of Google-parent Alphabet Inc., to test a shuttle service that uses self-driving minivans to bring customers to Walmart stores.
Earlier this year, Uber Technologies Inc. ended a two-year-old deal to have its drivers handle grocery deliveries for Walmart across four U.S. cities.
Internet Retailer’s upcoming 2018 Online Food Report, set to launch later this month, will include much more about Walmart and its online grocery strategy.