In an unlikely marriage between a food courier delivery service and a mega-retailer known for rock-bottom prices, some of the problems being reported by the first company’s contracted workers, who actually have to meet the needs of the customers, may have been somewhat predictable.
A survey of no less than 1 million DoorDash drivers who signed up to deliver Walmart goods to households in the wake of the coronavirus pandemic are revealing what Reuters writers Hilary Russ and Richa Naidu call “etiquette issues” – where the drivers do all sorts of work for very little money, partly because they don’t get the types of tips they would anticipate.
The program, Russ and Naidu report, helps DoorDash to compete with Grubhub, its largest and most prominent rival, but the trouble with implied tipping is that the awareness apparently wasn’t there on the part of customers.
Hilary Russ and Richa Naidu point out that if people don’t pay for other grocery deliveries, they may be conditioned not to pay for groceries and non-food goods delivered by DoorDash. The authors also cite the impact of automation, with robot-staffed warehouses to help expedite the Walmart delivery processes, where self-driving delivery vehicles are the obvious missing link.
There’s also the Walmart+ subscription program, launched in September, which CEO Doug McMillon said last month is crucial to the company’s new efforts. The program costs $98 a year and offers unlimited grocery and merchandise delivery for store orders over $35. It’s easy to imagine someone using this program heavily, and doing less tipping, to try to recover value from the original subscription. Also, Chad Oviatt, director of investment at Walmart shareholder Huntington Private Bank, delivers this obtuse comment as part of Reuters coverage:
“Logistics and delivery will continue to be a bit of a pain point for Walmart because they view it as a place where they could potentially reduce costs.”
Meanwhile, a company with the unfortunate name of “Deliveroo” is poised to become the biggest London IPO of its kind with a potential valuation of 12 billion pounds.
Deliveroo plans to price shares at 3.90 to 4.60 pounds, and cites a “strong start to 2021,” where the company, spokespersons say, got a “covid boost” with gross transactional value up 64% to 4.1 billion pounds.
The company’s IPO strategy allows it to be listed on the FTSE.
Keep an eye on this rapidly changing business.
