Amazon helps entrepreneurs start delivery companies for their packages

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Amazon.com is asking small business owners to help deliver their wares, seeking to reduce their dependence on US mail and other major delivery services as the number of parcels shipped continues to increase.

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The online retailer, who shipped last year over five billion packages via its Prime program, said last week that he was looking for hundreds of "entrepreneurs" with little or no no logistical experience "to create their own delivery business. Amazon vehicles and uniforms. (Jeff Bezos, founder and CEO of Amazon, also owns the Washington Post.)

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"Customer demand is higher than ever and we need to strengthen our capabilities," said Dave Clark, senior vice president of global operations for Amazon, in a statement. "We will allow new small businesses to train in order to take advantage of the growing opportunity of online parcel delivery."

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But labor professors say that the arrangement allows Amazon to reap the benefits of an extensive delivery network without having to assume many of the risks and responsibilities involved.

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Amazon has looked for ways to reduce costs on the so-called last-mile deliveries, which is often the most expensive part of the fulfillment process.

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Last year, she introduced Amazon Flex, which allows independent drivers to take shifts to deliver parcels in town. Amazon now allows couriers to take parcels directly from customers or, in some cases, their parked cars.

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Amazon's dependence on services such as the US Postal Service, UPS and FedEx, which currently deliver the bulk of its packages, also has drawbacks.

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There were delays in delivery and capacity constraints during the holiday season. And shipping costs are one of Amazon's biggest expenses, especially amid rising premium orders, which promise a two-day free delivery.

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Then there is the political cost. President Donald Trump, in a series of tweets, attacked Amazon for "costing massive amounts of money at American posts to be their Delivery Boy." (The Postal Regulatory Commission, an independent federal agency, oversees the price structure annually reviews its contract with Amazon to ensure that it continues to be profitable for USPS.)

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Amazon has built a fleet of more than 6,000 trailers and nearly three dozen freight jets to expand its long-distance delivery network.

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Under the new program, each small business could have up to 40 delivery vehicles and 100 employees, Amazon said.

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The company said it would help keep startup costs at around $ 10,000 by offering discounts on vehicles, uniforms, fuel and insurance coverage.

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Amazon is also setting aside $ 1 million to help military veterans interested in starting their own delivery business.

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According to Benjamin Sach, professor of labor law and industry at Harvard Law School, the company can avoid paying benefits such as overtime, accident compensation, and so on. work and unemployment insurance using independent contractors rather than employees of Amazon. ]

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"This is a change in risk that we have seen across the economy as companies convert people who should be employees into independent contractors," he said. he declares. "There could be a whole series of problems here."

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Others have pointed out that small entrepreneurs would be completely dependent on Amazon for work and wages. The company, meanwhile, says that business owners with 20 to 40 vans could make between $ 75,000 and $ 300,000 in annual profits.

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"This would give Amazon even more bargaining power by making the worker totally dependent on them for wages, hours and stability," said Stephanie Luce, professor of social studies at the City University of New York.

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"This represents a general trend towards increased power for employers as workers cancel their rights."

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others, however, compared Amazon's ambitions to a franchise business model, in which a company such as McDonald's could manipulate branding and marketing but leave the daily operations to the local owners.

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"There are some things that big centralized companies do well but there are other things where local people know better, and last mile delivery is one of them," said Paul Oyer, professor Economics and Entrepreneurship at Stanford University. Business School.