NEW YORK / CHICAGO (Reuters) – Third-party delivery company DoorDash Inc is taking steps to address what it says are frustrations from independent drivers carrying Walmart Inc goods and groceries orders, including low customer tips, the company confirmed to Reuters.
The largest retailer in the world in recent years has strengthened its partnerships with third-party courier companies on the same day, including DoorDash, to reach consumers in and around dozens of U.S. cities and better compete with Amazon.com Inc. The push came when Walmart wrapped up the use of drivers initiatives from Uber Technologies Inc and Lyft Inc and struggled to use its employees to deliver packages.
On February 26, DoorDash interviewed over 1 million independent drivers, asking them to share “experiences” about deliveries for Walmart. “We listened to your feedback. It improves Walmart orders, ”the survey said, according to a version that Reuters saw that DoorDash confirmed as genuine.
As DoorDash expands beyond its urban restaurant roots to deliver it all – from groceries to gardening tools: there have been problems with etiquette across the country. Americans who are used to tipping burgers or burritos don’t always think about tipping for delivery of household items or pet food. After all, they don’t tip for postal, UPS, or Amazon deliveries.
Last month, CEO Doug McMillon said delivery is key to his Walmart + subscription program, which launched in September. The program, which costs $ 98 per year, offers unlimited delivery of groceries and goods for orders over $ 35 from Walmart stores.
“Logistics and delivery will continue to be a bit of a pain point for Walmart because they see it as a place where they could potentially cut costs,” said Chad Oviatt, director of investment at Walmart’s Huntington Private Bank shareholder.
The partnership with Walmart has helped DoorDash gain market share from rivals including Grubhub Inc and tapping into new demand pockets for delivery in suburban areas, where many Walmart stores are located.
But some DoorDash drivers complain of heavy loads and long waits for packages to be picked up in stores. Customer suggestions are another sore point, especially for drivers who are used to getting larger tips on restaurant orders, several people said.
After her day job, DoorDash driver Kat Ensey, 53, makes money by delivering sandwiches and sodas outside Chicago. Taking Walmart orders to shoppers’ homes is less profitable, he said. Ensey, 5 feet 2 inches tall, once recalled carrying 13 30-pound bags of dirt from his car through a muddy courtyard to the back patio of a Walmart customer. DoorDash paid her $ 4 for delivery. The customer did not tip.
Until last fall, Walmart’s app, which accepts customer delivery orders, didn’t allow shoppers to include tips in advance. Instacart Inc, a third-party service that handles deliveries for Kroger Co and other grocery stores, includes a $ 2 pre-delivery tip, and Amazon.com Inc’s Whole Foods and Amazon Fresh includes a $ 7 tip. they can then change the amounts.
DoorDash said it contacted Walmart last year to allow customers to add a tip to their order before finalizing a purchase. A Walmart spokesperson said this was “a great idea” and changed its app in October to allow online shoppers to tip before paying for their order.
Since that move, he said, 75 percent of Walmart shoppers are handing out tips. But the DoorDash spokesperson said the company didn’t finish updating its app until the end of February, so drivers couldn’t see the suggestions before deciding to accept a delivery.
‘CHANGES TO THE HORIZON’
While DoorDash regularly checks with its drivers on various issues, its February survey focused entirely on Walmart, asking recipients to rate how likely they are to recommend delivery of Walmart products to other drivers.
The document also promised “there are more changes on the horizon” related to its relationship with Walmart, although it did not specify what those are. DoorDash declined to provide the survey results to Reuters or to work out future changes.
DoorDash said it charges different prices based on the distance, time, and services its merchants need. Spokespersons for Walmart and DoorDash declined to disclose the financial terms of the companies deal.
Walmart said it has taken several steps to accelerate online orders for pickup and delivery, including increasing the number of personal shoppers in stores to over 170,000 from over 63,000 in November 2019, a move that could help reduce driver waiting times for packages.
Walmart is also adding small robot-operated warehouses to dozens of its stores to help fulfill orders faster, the company said in January.
Some Walmart employees also “regularly” drive third-party delivery companies so they can report their experience to Walmart.
DoorDash driver Brian Cavanaugh, 48, said he is happy to take all orders, including Walmart, when delivering out of Cleveland. After a recent Walmart order, a customer tipped him $ 40.
“If I see a Walmart order, within seconds I hit that button to accept it,” he said. “The Walmart experience for me has been nothing but positive.”
Hilary Russ in New York and Richa Naidu in Chicago; additional reportage by Jeffrey Dastin in San Francisco; Editing by Nick Zieminski