Walmart to buy its gig-labor management partner

Dive Brief:

  • Walmart is buying Delivery Drivers Inc. (DDI), the gig-labor management company that is the partner for the retailer’s Spark Driver platform, a Walmart spokesperson said in an email. The acquisition is for an undisclosed amount, according to Insider, which first reported the news.
  • The acquisition of DDI aims to streamline the driver experience with a single point of contact, and all of the gig-worker management company’s employees will be offered jobs at Walmart in the deal, a Walmart spokesperson told Business Insider.
  • The acquisition comes at a time when Walmart is building out its Spark Driver offering, which has gig workers fulfill orders for both the retailer and for GoLocal, the retailer’s white-label delivery service. 

Dive Insight:

The DDI acquisition marks the latest move for Walmart as it rapidly expands its delivery capabilities and options. 

Founded in the late ’90s and based in Irvine, California, DDI connects businesses with independent contractors for last-mile deliveries, providing human resources and driver management solutions for the gig workers. 

“We’re always looking for ways to build a better experience, and heard from drivers that working through two companies for support wasn’t ideal. Bringing driver support in-house will provide a simplified experience,” the Walmart spokesperson told Grocery Dive.

DDI told non-Walmart customers on Wednesday its service with them will end in 30 days due to a “strategic change in the company’s direction,” Insider reported. The news outlet noted DDI has supplied human resources, recruiting, insurance, accounting and payment services to Walmart’s Spark program since 2018.

The Spark Driver platform reaches 84% of U.S. households, and the retailer plans to continue growing the program, Nav Chadha, vice president of the Spark Driver platform, said in a company post Wednesday. The platform, which launched four years ago, is now available in more than 600 cities, according to its website

“We now have thousands of independent contractors who choose to drive on the Spark Driver platform, making it the largest delivery provider for Walmart,” Chadha wrote. 

Separately, Walmart confirmed it had parted ways with DoorDash, with Insider reporting the third-party e-commerce provider pulled the plug on the tie-up.

The delivery changes come as Walmart is pushing its omnichannel strategy and seeing continued e-commerce sales growth. In its second quarter, the retailer saw e-commerce sales in the U.S. increase 12% year-over-year, executives told investors Tuesday. During the quarter, GoLocal, which was announced last summer, surpassed 1 million deliveries.

Walmart has made a string of recent announcements to build out its last-mile capabilities and support its omnichannel efforts. 

Earlier this month, Walmart said it is buying omnichannel tech specialist Volt Systems. Last month, the retailer said it will purchase 4,500 all-electric delivery vehicles from Canoo to fulfill e-commerce orders starting next year and added its InHome Delivery service, where workers deliver orders to customers’ refrigerators, to its Walmart+ membership program. In June, the retailer said its GoLocal service is delivering for Local Express, an e-commerce platform for grocers. 

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