Walmart offers incentives to beef up delivery fleet ahead of holiday season

Walmart (NYSE:WMT) is turning up the heat on Amazon (AMZN) ahead of the busy holiday season and stepping up its delivery service with new incentives for delivery drivers and discounted memberships offering free shipping.

As part of a new strategy to appeal to upper-income shoppers and lure consumers away from Amazon (AMZN) with one-day or same-day delivery, Walmart (WMT) is offering independent delivery drivers increased incentives and more earning opportunities to pick up orders at the store and deliver directly to customers, according to Reuters.

The retail giant is also slashing the cost of its Walmart+ annual membership by 50% to $49 to compete with both Amazon (AMZN) and Instacart (CART). The membership offers unlimited, free same-day delivery on orders over $35, free grocery delivery, discounts on gas, and free returns from home.

By comparison, an Amazon Prime membership costs $139 per year, offers unlimited free shipping and same-day delivery on eligible orders, free returns, and 2-hour grocery delivery.

With a fleet of 100K gas-powered delivery vans, 10K electric vans, 30K Amazon-branded delivery vehicles, and 20K Amazon trucks, the company has a significant delivery moat over competitors like Walmart (WMT) and Target (TGT). But Walmart (WMT) hopes that by employing the use of a Walmart-designed platform called Spark Driver, it can increase its fleet of independent drivers to a competitive level.

Similar to ride-sharing and grocery-delivery apps, Spark Driver allows independent drivers to make deliveries and shop for Walmart and other retailers. Spark drivers can earn around $24.55 per hour on average, versus the average hourly pay of $18-$25 per hour for an Amazon (AMZN) driver. Amazon Delivery Service Partner drivers, however, earn on average $38 per hour, according to ZipRecruiter data.