*

Payouts from Spark Driver program can be unpredictable,

drivers

say

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Spark Driver crucial for boosting e-commerce and Walmart

Plus

subscriptions

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Walmart ( WMT ) enhances security features for Spark Driver app

after

data breach

By Siddharth Cavale

NEW YORK, Nov 8 (Reuters) - Walmart ( WMT ) will pay

independent delivery drivers new financial incentives to pick up

online orders at its U.S. stores and deliver them to shoppers

during the holiday season, the retailer told Reuters.

The move is part of Walmart's ( WMT ) strategy for boosting sales to

upper-income households and competing with e-commerce rival

Amazon.com ( AMZN ), which is selling more everyday essentials

to shoppers that it delivers in a day or two.

Josh Havens, spokesperson for the world's biggest retailer,

said the company would offer delivery incentives and more

earning opportunities to existing drivers. He declined to

provide details.

U.S.-based Walmart ( WMT ) relies on a loosely organized network of

thousands of freelance drivers who download a Walmart ( WMT )-designed

app, Spark Driver, to their cellphones.

"Spark Driver is very important to Walmart ( WMT ) ... because it

helps grow e-commerce sales and Walmart Plus subscriptions,"

said Arun Sundaram, senior vice president at CFRA Research,

referring to its membership program.

Walmart's ( WMT ) global e-commerce business surpassed $100 billion

in sales in 2023, and Chief Financial Officer John David Rainey

said in June he expects its U.S. e-commerce business to turn a

first profit in the next year or two. Walmart ( WMT ) is focused on

improving its e-commerce margins by delivering more goods to

shoppers' homes directly from its stores using Spark Driver, he

said previously.

VARYING PAY

Spark Driver pay varies according to order size and

distance. If an online shopper requests delivery to an

apartment, or of heavy items such as furniture, drivers earn

more, according to Walmart ( WMT ).

Gridwise, a data-analytics company that helps drivers track

their earnings, reports that from October 2023 to September

2024, Spark Drivers earned a gross average of $21.90 per hour

and $12.26 per trip.

Joseph Wilson of Bloomington, Indiana, a Spark Driver since

2022, said payouts can be unpredictable, however.

"There doesn't seem to be any logic behind how they estimate

driver payouts before tips," he said. "I can receive an order

for seven items for $20 (pay) or an order of 50-plus items for

$7. It's really frustrating."

To broaden its delivery service's appeal to shoppers,

Walmart ( WMT ) slashed the annual fee for its Walmart Plus membership,

by 50% ahead of the holiday season. Walmart Plus members receive

unlimited free same-day deliveries from stores on orders over

$35.

The retailer is offering U.S. shoppers a one-year membership

for $49 through Dec. 2. Walmart Plus is on track to reach 32

million members by year-end from 29.2 million in 2023, research

firm Emarketer estimates.

Amazon ( AMZN ) is also taking aim at Walmart ( WMT ) with a $99.99-a-year

add-on fast grocery delivery service for Amazon Prime members.

Amazon Prime membership costs $139 per year. The e-commerce

giant has 180 million U.S. Prime members, according to Consumer

Intelligence Research Partners.

Quick store-to-home deliveries have helped Walmart ( WMT ) boost its

market share as more upper-income households subscribe to

Walmart Plus, the company said in February, without providing

details.

With more subscribers, Walmart ( WMT ) can potentially earn more

advertising revenue from consumer products and food companies

pitching their brands on Walmart.com, Sundaram said. Walmart ( WMT )

sells ads to its suppliers through its highly profitable Walmart

Connect retail media business that generated about $3 billion in

2023.

Spark Driver suffered a data breach in February, according

to Walmart ( WMT ), where hackers stole personal data from Spark Driver

accounts, including Social Security numbers. Two drivers who

spoke to Reuters said scammers used this data to create profiles

and impersonate drivers.

Walmart ( WMT ) spokesperson Havens said the retailer has simplified

incentives ahead of the holidays and improved safety features,

such as stricter password requirements and selfies to log in.

Walmart ( WMT ) is also piloting physical ID checks at some stores.

Walmart ( WMT ) executives will provide their holiday-season outlook

with third-quarter results on Nov. 19.