Walmart to offer delivery services for local businesses

Walmart says it will start commercializing its delivery service, using contract workers, autonomous vehicles and even drones to deliver other retailers' products directly to their customers' homes as fast as just a few hours.

The Bentonville, Arkansas-based retailer launched delivery and Express delivery for its shoppers three years ago on more than 160,000 items from more than 3,000 stores, reaching nearly 70% of the U.S. population. The nation's largest retailer aims to tap into its ties with local communities, particularly businesses in rural areas that have struggled to implement their own delivery operations.

The strategy announced Tuesday will pit Walmart against the likes of Uber, DoorDash and other delivery services. It comes as Walmart moves to expand its sources of profits and revenues beyond its core retail businesses. It's a strategy similar to Amazon's cloud computing unit called Amazon Web Services, which the online behemoth built for itself and now sells to other businesses.

The service, Walmart GoLocal, has already signed a number of contractual agreements with national and small business clients, which it declined to name. Walmart is currently selecting new business partners. Walmart declined to offer figures on the investment or financial targets for the service. It is to begin operations within a few months.

Last month, Walmart began offering small- to medium-size businesses e-commerce technology it developed to let shoppers buy products online and pick them up at stores. It's part of a partnership with technology provider Adobe.

During a call with reporters Monday night, Tom Ward, a senior vice president at Walmart's U.S. division, said that fees for the service will be negotiated on a case-by-case basis. The delivery time could be as fast as a few hours or up to two days.

"In an era where customers have come to expect speed and reliability, it's more important than ever for businesses to work with a service provider that understands a merchant's needs," said John Furner, president and CEO of Walmart's U.S. division.

Increase in driver services

Services like Uber, DoorDash and Instacart are seeing an increase in drivers signing up for their delivery platforms, a large percentage of whom are women whose careers have been impacted by the pandemic. 

The stock price at some gig companies took a hit Monday, as investors reacted to a Friday court ruling from Alameda County Superior Court Judge Frank Roesch, overturning the state's Proposition 22 as unconstitutional. 

DoorDash's stock price fell almost 2% to $180 a share Monday morning, but rebounded by mid-morning Tuesday.

Prop 22 shielded app-based ride-share and delivery companies from a state labor law that requires most companies to classify drivers as employees rather than as independent contractors. Independent workers aren't eligible for benefits and job protections such as paid sick leave or unemployment insurance, making them much cheaper to hire than traditional employees.