e-commerce giant Amazon has once again come under fire for its treatment of workers, namely for the treatment of its Amazon delivery service partners (DSP) owners and drivers.
Amazon’s DSP program allows individuals to set up their own last-mile business to deliver packages for Amazon. These businesses are technically independent but will often rent vans owned by Amazon and are paid by Amazon for the routes they complete. These DSP businesses will usually have around 20-40 amazon vans and up to 100 employees, according to Amazon. Amazon also stated that the DSP program has expanded to 10 countries, creating 158,000 jobs at 2,500 DSPs. As such, many workers that users of Amazon are familiar with, in Amazon uniforms and driving blue vans, do not technically work for Amazon.
According to Amazon, individuals can be their own boss through its DSP programme for $10,000 and can make up to $300,000 a year. The core benefit of the DSP program for Amazon is that it reduces the company’s reliance on traditional carriers; according to CNN, Amazon delivered two-thirds of its own packages in North America in 2020, only two years after delivering only 20%. Peter Moore, a Georgia College & State University professor who studies logistics and supply chain management, told CNN that the program also has the flexibility to avoid high unionised labour costs. Branded trucks that independent businesses rent also act as advertisements for Amazon.
However, there are increasing concerns regarding the treatment of both DSP owners and the drivers they employ. Two articles by lifestyle magazine Vice, published in 2022, highlighted anecdotal evidence that Amazon has terminated contracts for DSP owners, leaving individuals in large amounts of debt. Contracts are often terminated due to what Amazon has described as failure to ramp-up to Amazon’s route targets, meaning that DSP drivers have been unable to deliver as many parcels as Amazon would like. However, acute labour-shortages have meant that DSP owners have struggled to employ drivers, with reportedly limited assistance from Amazon. Furthermore, a recent Union study has reported that around 1 in 5 Amazon delivery drivers were injured in 2021.
Although Amazon disputes the data’s claims, arguing the information is “cherry-picked”, the fact remains the company has faced a series of lawsuits, alleging unfair treatment, false promises about profits, and unlawful termination of delivery contracts. The most recent, a class-action lawsuit filed in federal court in Seattle by a company called Fli-Lo Falcon, LLC, puts a particular emphasis on challenging the legality of the business relationship between Amazon and its DSP’s. These are not the only lawsuits that Amazon must contend with; in April 2022 two lawsuits were filed after a tornado in December caused the collapse of a warehouse in Illinois. There are also several lawsuits in the works alleging work discrimination.
For all its success, Amazon may now face a series of choices regarding the rights and benefits of its workers if it wants to maintain the last-mile network it has spent the past years building to compete directly with the likes of FedEx and UPS.
Source: Transport Intelligence, 16th June 2022
Author: Nia Hudson