Why Amazon gives employees $ 10,000 to quit

The last mile of delivery, which involves placing an order with the customer, has long been an obsession for ecommerce companies. To make the trip as efficient as possible, some have engaged in extreme experiences. Take Walmart: Two years ago, the company had been trying to ask its employees to place their orders online before and after work, in their own cars. This idea was later abandoned, but the problem of the last mile remains, even for the biggest retailers. Amazon now offers to pay thousands of dollars to its employees for providing packages. They just need to leave their current job beforehand.

Last June, Amazon created the Delivery Service Partner program to enable entrepreneurs to start their own business by delivering packages to Amazon. The idea was to move orders quickly, without the need to use UPS or FedEx. On Monday, Amazon announced that it would begin offering employees up to $ 10,000 in start-up costs to allow them to leave their current position to join the program, as well as three months of gross salary. The initiative comes as Amazon insists that Prime orders be delivered in one day instead of two, making the last mile all the more important.

Anyone can register as an Amazon Delivery Service partner. You must invest at least $ 10,000 and have liquid assets of at least $ 30,000 (the latter requirement is being lowered for employees). These strict rules may be one of the reasons why Amazon is now turning to its own staff for help. The company said more than 200 delivery partners had emerged in the past year, but the US labor market remained extremely tight and the number of additional people able to participate in the program was was not clear. In addition, Amazon seems to prefer to contract with small delivery companies. On its website, partners typically have fewer than 100 workers and 40 vans. Amazon's current partners may have very little growth, while their delivery needs do not seem to be limiting.

Delivery partners are considered as subcontractors. The drivers who work for them are not employees of Amazon. Although they can technically work for any business, Amazon offers its partners access to branded vehicles that can only be used to transport Amazon packages. This employment structure allows Amazon to compete with companies such as FedEx, which also has third-party drivers driving its vans and trucks. And this prevents Amazon from providing drivers with benefits such as health insurance.

That's not to say that Amazon has completely avoided using individual distribution drivers. Since 2015, it relies on its Flex platform, which resembles that of Uber, where contract drivers can sign up for mail services in an evolved way, for a fee. between 18 and 25 dollars at the hour. According to Cathy Morrow Roberson, founder of Logistics Trends & Insights Logistics Research and Consulting, the program may be tedious. She added that companies should not depend on crowdsourcing for their entire last mile strategy, as it is difficult to plan such a precarious workforce.

Amazon Flex is also revealed to be a nightmare in public relations. A series of media surveys and first-person testimonials have documented the exhausting work that can accomplish delivery for Amazon, and how drivers must submit to the use of facial recognition.

Delivery partners, on the other hand, can manage their drivers as they wish. This freedom may be of interest to many Amazon employees interested in starting their own business. Becoming a delivery partner could also be a wise business decision, especially since standalone delivery services are still years away. Although Amazon automates quickly other parts of its supply chain, it will be necessary to continue to use pilots to make sure that the packages make the last mile.

Meanwhile, Amazon rivals are catching up: Walmart has announced that it will also offer a delivery the next day.

Do you have advice on Amazon? Contact the author at [email protected] or via Signal at 347-966-3806.

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