Amazon to boost pay for contracted delivery drivers

An Amazon driver masses packages right into a delivery van at an Amazon delivery station on November 28, 2022 in Alpharetta, Georgia.

Justin Sullivan | Getty Images

Amazon mentioned it plans to boost wages for contracted drivers as a part of a $440 million funding this yr into its third-party delivery program, however declined to say by how a lot.

The firm introduced the pay bump at an annual, closed-door convention known as Ignite Live with the three,500 small companies that make up its delivery service associate program. The DSP program, launched in 2018, includes roughly 279,000 drivers, usually distinguishable by blue Amazon-branded vans, who’re accountable for deilvering packages the previous few miles to customers’ doorsteps.

“This goes instantly to DSPs, in order that they will supply aggressive pay to their staff, and construct and retain nice groups,” mentioned Beryl Tomay, Amazon’s vp of final mile delivery and expertise, in an interview.

DSPs are “free to set their very own wages and incentives,” although Amazon units a minimal pay customary via the contracts it indicators with the businesses, Tomay mentioned.

Amazon didn’t disclose any monetary particulars of this system, nor what the common minimal wage is for DSP drivers. The DSPs commonly pay above the minimal set by Amazon, and it audits DSP wages “frequently,” Tomay mentioned. The quantity differs relying on the place the contractors are based mostly, amongst different elements, she mentioned.

Pay will increase will start rolling out to delivery firms in mid-October.

The DSP program is a key weapon Amazon’s logistics arsenal that is allowed it to reduce its reliance on carriers just like the U.S. Postal Service and FedEx whereas speeding up deliveries. Amazon has invested about $8.9 billion in this system since its inception, and DSPs have generated over $45 billion in income over the previous 5 years, Tomay mentioned.

The transfer comes as Amazon faces a renewed push from the International Brotherhood of Teamsters to unionize its delivery driver workforce. Since June, the union has set up picket lines at a couple of dozen Amazon warehouses within the U.S. to increase issues about working situations, after the corporate in April cut ties with a California-based DSP that unionized with the Teamsters. Critics have argued Amazon depends on subcontracted delivery drivers to dodge legal responsibility and keep away from unionization.

Amazon has beforehand mentioned it respects its staff’ proper to be part of or not be part of a union.

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