DoorDash said last week it is ending its four-year delivery partnership with Walmart. The partners have said the split comes as Walmart continues to focus on being its own third-party delivery service and DoorDash chooses to focus on its long-term customer relationships.
“We’d like to thank Walmart for their partnership and are looking forward to continuing to build and provide support for merchants in the years ahead with our leading Marketplace and Platform offerings,” a spokesperson from DoorDash said Friday.
The partnership will end this month and the services will be terminated effective Sept. 1.
“As for our agreement to part ways with DoorDash, we’d like to thank DoorDash for their partnership and support of our customers the past several years,” a Walmart spokesman told Talk Business & Politics in an email.
The partnership was not always a bed of roses and the partnership dissolution did not surprise industry watchers. In August 2021, DoorDash surveyed more than 1 million of its independent drivers asking them to share their experiences about deliveries from Walmart. DoorDash reported the biggest complaints about picking up orders at Walmart was the wait time and low tipping.
T.D. Davis, an independent DoorDash driver in the Dallas/Fort Worth metro area, told Talk Business & Politics he does not like to pick up orders from Walmart because of the wait times saying they are often bulky, and include lots of bottled water that has to be hauled up two flights of stairs for very little tip. He said more money can be made delivering burritos from Chipotle Grill or seafood from Pappadeaux where customers are accustomed to tipping.
Despite the negative driver sentiment, Walmart and DoorDash maintained the partnership. But Walmart has made no secret of its plans to grow its own delivery platform referred to as Spark and its delivery for hire platform GoLocal.
Walmart confirmed last week it was acquiring Delivery Drivers Inc. (DDI), a gig-labor management company that has partnered with the retail giant for several years running its Spark platform. The DDI purchase is hoped to help Walmart improve the drivers experience with a single point of contact.
Walmart will need more workers as it builds out its GoLocal delivery-for-hire service which aims to have 5,000 pickup points by the end of the year, and it continues to add more Walmart inHome customers though discounted rates for Walmart+ members.
Walmart said its Spark platform has grown to become the company’s largest delivery service provider and it accounts for 75% of Walmart deliveries. Walmart’s Spark platform reaches 84% of the U.S. households, and because many Spark delivery workers are also Walmart employees the retailer can better control the service experience.
Walmart said it will continue to use a third-party delivery service in select areas for its deliveries.
Walmart recently ordered 4,500 all-electric delivery vehicles from Canoo that will be used to deliver e-commerce orders, including grocery, starting next year.
Walmart CEO Doug McMillon said during the Aug. 18 earnings call that the company would continue to invest into technologies such as the GoLocal platform that surpassed $1 million in revenue last quarter.