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Two Portland delivery companies revolt against Amazon, shut down

331 points| watchdogtimer | 4 years ago |vice.com | reply

301 comments

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[+] softwaredoug|4 years ago|reply
> "The companies were losing money and employees trying to satisfy Amazon and their constant abusive changes,” Tom Rask, an attorney for Last Mile and Triton, told Motherboard. "You have to hire numerous drivers who may or may not be working. One day Amazon dictates that you have thirty routes, the next day forty, then the day after twenty. You’re supposed to have enough drivers for back-up while Amazon is lowering pay. Amazon’s actions are unlawful."

Sounds miserable. Id shut down too if I was losing money with only 1 client.

If this were freelancing it’d be like having to be always available for one client 40 hrs a week, but not knowing if you’ll get to bill 5 hrs or 50… while your rates constantly decrease. There’s no point in having this business

[+] paulpauper|4 years ago|reply
Freelancing just sounds awful for this reason. Yeah some ppl can make a lot but still seems like an awful way to make money if you are an american. Consulting is somewhat different
[+] alisonkisk|4 years ago|reply
This is basically how shift work in hospitality and service jobs works, and it's terrible.

Some people claim it's done intentionally to prevent workers from working other jobs where they might get tired or escape the first job.

[+] kjs3|4 years ago|reply
If you're building your business around 1 client who isn't the government, I would humbly argue you're doing it wrong.
[+] WalterBright|4 years ago|reply
> their constant abusive changes

What does their contract with Amazon say? Who would sign a contract that permits "constant abusive changes"?

[+] D13Fd|4 years ago|reply
This is more or less how it should be. If Amazon isn't going to offer a good enough deal, then companies shouldn't move packages for them. As more and more people figure it out, other delivery companies will stop working with Amazon as well, although it may be that the deals work out better in places with lower cost-of-living, easier delivery routes (due to climate, geography, etc.), or other advantages.

If some other delivery company can figure out how to make it work economically, then they can do the work instead.

If nobody is interested in trying to make it work, Amazon will have to either improve the deal it offers or go back to using FedEx/UPS/USPS.

[+] tablespoon|4 years ago|reply
> This is more or less how it should be. If Amazon isn't going to offer a good enough deal, then companies shouldn't move packages for them.

Not really. These companies are basically committing suicide, because Amazon is in such a dominant position. The way is should be is that they could have put pressure on Amazon much earlier, instead of being forced into such extreme action.

Nothing will change. Amazon will just shift to exploiting a different group of suckers through Amazon Flex, or go back to UPS for awhile until the lessons learned from this dissipate. It's not like there's a club of past & future delivery company operators that meets regularly, to keep the knowledge of how bad it is to work with Amazon alive. As the saying goes: "a sucker is born every minute."

[+] MattGaiser|4 years ago|reply
I suspect Amazon delivery will turn into Tyson and its chicken growers. Just keep selling the business to a new group of people who cannot leave because of their substantial investment in equipment.
[+] HighInquisitor|4 years ago|reply
I struggle to grasp how this kind of libertarian vision of the world can possibly be maintained by anyone who actually observes how the world works.

No, markets don't self-regulate. Companies won't stop working with Amazon across the board, and those that do will be replaced by companies willing to work for less, because they're full of people willing to work for less.

We know that's how this works. We know that people and organizations alike (since they're run by people) under this system don't have libertarian principles, let alone the will power to stand up for them.

Most people do not, in fact, feel the sense of righteous indignation needed to make such decisions, nor the ability to freely disassociate from sources of income, because they'll quite literally end up out in the street if they do, so they go along with anything, and rightly so, because survival comes first.

The only force that has the ability to stop powerful corporations from exploiting people in this way (hiring those willing to work under terrible conditions, for terrible pay, etc.) is the state, with its monopoly on violence, by quite literally threatening the executives of the corporations with death or prison time for not complying.

But the same libertarian-minded people who think the market self-regulates also stand against using state power to control the corporations by force.

So here we are. The Profit Motive destroying everything, and a fervent group of people fortunate enough to have the wealth to make independent decisions to disassociate with parties that provide their income lecturing those who don't have that luxury about how they too should make such decisions.

[+] subhro|4 years ago|reply
Good points. But, with Amazon taking the lion’s share of online sales, how much of delivery is left outside of Amazon?

I am not advocating for Amazon, just wondering if this move is sustainable for the employees while Amazon gets (theoretically) strong armed.

[+] hiccuphippo|4 years ago|reply
Or Amazon can just buy them and make it work.
[+] blakesterz|4 years ago|reply
Wow, I guess I never really paid attention to the details behind all the Amazon headlines I see.

"In April, Amazon announced it would reduce the amount it paid for drivers from $17.25 to $16.00 an hour, according to the letter...Weeks later, Amazon announced a series of raises for its drivers around the country as part of a public relations push following a union drive at an Amazon warehouse"

"Currently, Amazon delivery drivers are expected to deliver upwards of 400 packages a day on 10-hour routes that often extend up to 12 hours."

400 seems crazy, I wondered about UPS. According to Google "At UPS, the average driver makes about 120 deliveries per day, says Jack Levis, the shipping giant's director of process management"

[+] nonfamous|4 years ago|reply
> [contract delivery companies] have to adhere to a strict set of rules from Amazon around hiring, pay, delivery times and routes, and more.

The only one of these that Amazon has any right to dictate is delivery times (and what they will pay for that delivery). The fact that Amazon has direct control over the contractor’s worker’s pay, and even the ability to fire those workers, is very shocking to me.

Remember, this isn’t a situation like Uber: these are not contractors to Amazon, but employees of independent delivery companies.

[+] CobsterLock|4 years ago|reply
Are these the same drivers that wear Amazon vests, drive Amazon cars and can only deliver for Amazon? Seems like Amazon is doing some legal loophole with "3rd party" companies to get around actually employing these drivers and giving them the full time benefits they are entitled to by law

I'm so tired of this dumb gig economy that isn't long term sustainable.

[+] zaroth|4 years ago|reply
The drivers are W2 employees who work for the delivery companies. The delivery companies pay hourly plus benefits. Amazon’s contract is with the delivery company.

This isn’t a gig economy thing and there are no contractors / 1099.

Two businesses can put whatever contract provisions into their agreement that they want to as long as laws aren’t being broken.

[+] MattGaiser|4 years ago|reply
Amazon probably does not dictate pay directly. They just put in the contract that all workers must make X and get health insurance.
[+] axaxs|4 years ago|reply
I don't get Amazon's play here. Just charge me more money for items, and pay your people well. I'd rather have a happy safe driver than a miserable one at the end of his or her rope, all so I could save a dollar.

Reminds me of Papa John complaining giving his employees healthcare would make prices go up 14 cents per pizza. Seriously? Who cares about 14 cents when ordering a pizza...

Amazon's entire value to me is fast delivery. Definitely not lowest prices, and definitely not quality.

[+] PragmaticPulp|4 years ago|reply
> I don't get Amazon's play here.

According to the article, so far it’s only two delivery companies in one city, not an actual large trend across the country.

When negotiating with providers and vendors at scale, it’s common for some of them to give “no bid” responses or withdraw from negotiations if they don’t think the contract will be worth their time. The only way to find true market rate is to negotiate until some vendors or providers decline or withdraw, which is more or less what’s happening here.

If Amazon was unable to find other market rate delivery companies or unable to deliver the packages themselves, they’d pay more. The article has a heavy anti-Amazon angle, but this is just what market rate price discovery looks like at scale. Amazon deliveries haven’t ground to a halt in the city, so presumably they have a cheaper solution than using these two companies that would only work for higher rates.

[+] thatsamonad|4 years ago|reply
These statements seem contradictory to me:

> I'd rather have a happy safe driver than a miserable one at the end of his or her rope

> Amazon’s entire value to me is fast delivery

My understanding is that the pace/quantity of deliveries is what makes the drivers miserable so if you want the drivers to be happier and not stressed then relaxing the delivery standards would have the most impact.

Do we really need most of the stuff sold on Amazon delivered in 2 days or less (or even at all)?

[+] dntrkv|4 years ago|reply
They need to provide more options for slower shipping.

So many of the items I order don't need fast shipping and I would gladly take slower shipping (and I do any time the option is available to me). Yet, a lot of the time, the slowest shipping available is next day for something that could come 2 weeks from now and it wouldn't make a difference to me.

Basically, they need to expand their no-rush shipping feature. It's a good idea, just not available that often.

[+] MattGaiser|4 years ago|reply
Amazon competes on price through, especially as Walmart gets into the game.
[+] amelius|4 years ago|reply
> I don't get Amazon's play here.

Shareholders, probably.

[+] LightG|4 years ago|reply
>>Amazon's entire value to me is fast delivery. Definitely not lowest prices, and definitely not quality.

Proper back-handed compliment! I'd agree, but adding on that 'customer service' is a key part of their value offering. To me (n=1), it's their moat. I'd be gone without it.

[+] Y_Y|4 years ago|reply
They wouldn't even have to change the prices. Amazon (overall, not necessarily on every sale) is making super-normal profit, in an industry where they dominate among few sellers and there are plenty of barriers to new companies entering and chipping away at the margin.
[+] matz1|4 years ago|reply
Thats you but I think majority of people, including me, would rather save a dollar.
[+] notsureaboutpg|4 years ago|reply
There are lots of e-commerce sites though, and many of them are nicer to browse, nicer-looking, have more realistic reviews, etc. than Amazon.

Amazon absolutely competes on price. I've seen it myself. If Amazon sells something for a buck cheaper, lots and lots of people will go to Amazon for that something and maybe pick up something else from it's recommendation system they forgot they wanted, etc.

[+] drzaiusapelord|4 years ago|reply
>I'd rather have a happy safe driver than a miserable one at the end of his or her rope, all so I could save a dollar.

I mean, that's just you and your ethics as a person. Capitalism demands relentless and permanent profit, so capitalist culture is middle-managers doing exactly the opposite of you. Worse, they're in a rat-race against other middle-managers to see who can save the most money. So the system is designed to make sure workers don't get decent wages, feel safe, or happy. The system can't be for relentless profit and kindess to employees, unless pressure from the outside via regulations or collective bargaining. I think the idea that good hearted people at these companies should just generous is a little naive. The good hearted most likely don't get into positions of power and even if they did, they're still playing the same oppressive game everyone else is for their own paychecks. Its greed and short-sightedness, and oppression all the way down.

[+] PaulDavisThe1st|4 years ago|reply
Strive to be Earth’s Best Employer

Leaders work every day to create a safer, more productive, higher performing, more diverse, and more just work environment. They lead with empathy, have fun at work, and make it easy for others to have fun. Leaders ask themselves: Are my fellow employees growing? Are they empowered? Are they ready for what’s next? Leaders have a vision for and commitment to their employees’ personal success, whether that be at Amazon or elsewhere.

from: https://www.aboutamazon.com/about-us/leadership-principles

[+] criddell|4 years ago|reply
> "We refused their demands and they followed through with their threat, terminating their contract with us, leaving their employees confused and looking for answers," she continued. "We’re doing everything we can to support the affected employees including connecting them with other Delivery Service Partners in the area who are hiring.”

I'd love for that PR person to drive the route one day and see if they can meet the quota. I can't help but to hear a lot of contempt in her statement.

[+] yawaworht1978|4 years ago|reply
One time in my younger days I had a delivery job in London, i would start at 3am , and needed to have the northern part covered before 7am as the traffic after that would slow me down to reach the south. Boss covered all speeding ticket expenses and parking tickets, the job was not possible without permanent speeding and good luck finding parking in London for a van. Every day I did one or two hours overtime, thinking it's paid. When payday came i demanded the overtime pay and he said "that's not overtime, you are slow". So I gave him the keys to the van and said "show me the way". He tried for a morning, took away to long before returning me the keys and agreeing to ot pay. I didn't really need the job, was just extra summer money, but I can see how many people who have a family to feed would accept with a tight lip and not complain.
[+] IncRnd|4 years ago|reply
Which words in that statement are contemptuous?
[+] drzaiusapelord|4 years ago|reply
Why? She knows the capitalism rat-race as well as you do, its just in her paycheck's interest to say these things just like you do capitalistic contributions for your paycheck. I think the idea that you lead an ethical work life and she doesn't is a bit out there. There's a lot of "but but my capitalism contribution is the only ethical capitalist contribution" in this thread. You're just as guilty as her of that regard.

Why aren't you doing the janitors job for a week everytime you think the bathrooms look a bit untidy?

[+] cduzz|4 years ago|reply
I suspect that amazon specializes in arbitrage.

They collect information in a domain (such as delivering stuff to places in a region). They build a detailed map of "easy to deliver" and "horrible to deliver" locations in that region.

After that, they take the "Easy to deliver" places for themselves and get a 3rd party to agree to deliver the rest, typically based on some rate scheme that is coarse to assume "average delivery pain" when in fact they're getting only the impossible delivery list.

[+] zaroth|4 years ago|reply
I work closely with someone who runs one of these Amazon DSPs.

He has 70 employees who love working there. In the last 6 months he has had only 2 people leave, and one due to their family moving.

He has a military background and he protects his people like they are his own unit. He deals with all the shit that Amazon throws down at him and builds his own processes and procedures to deal with things like day-to-day route variability.

The drivers work 10 hours a day 4 days a week. He will go in every morning and tweak the routes that the AI designs so that they can finish their 10 hour route in 8 hours, he still pays them for the full 10. Sometimes they will get done in 6 hours and run another route and make 2.5x their wage on the day.

He says the internal Amazon dashboards that track his company performance break due to his numbers. And everyone is making very, very good money with full benefits.

I’ve seen the numbers and anyone losing money running one of these shops is just doing a very poor job hiring, training, and managing the process.

I scoffed a year ago when he told me he was leaving his job to go do this. Since then I’ve eaten my words.

[+] emptyparadise|4 years ago|reply
>He will go in every morning and tweak the routes that the AI designs so that they can finish their 10 hour route in 8 hours, he still pays them for the full 10.

Amazon definitely wouldn't like to optimize that away.

[+] redleggedfrog|4 years ago|reply
Vote with your dollars folks. I'm 5 years in to an Amazon boycott and hardly even notice really.
[+] kingsuper20|4 years ago|reply
Clickbait title, it sounds like it's some huge movement, but I take their point.

It seems to me that the underlying issue isn't some sort of highly predatory company (Amazon in this case), a lot of them are or were.

The main trick is the ability to surveil and analyze employee activity. Imagine a 1950's auto factory where every location, utterance, and move by a worker could be gathered and parsed.

I'd say that programmers will get a good healthy dose of that going forward and WFH gave it a good healthy shove.

[+] hourislate|4 years ago|reply
I've started to shop directly with some retailers instead of buying through AMZN (ex: Thorne) and I've also noticed that AMZN has become increasingly expensive for many items, sometimes double the price than can be found locally (ex: Allouse). Being a Prime member doesn't really offer me anything that I can't live without. Sometimes I can get next day delivery but usually the item takes longer than 2 days. Recently I started some online shopping at Walmart and have been pleasantly surprised with the price and speed of service (sort of like AMZN use to be). I've decided to cancel my Prime Membership this Aug, mostly because AMZN just isn't competitive and offers less value these days.
[+] claaams|4 years ago|reply
I won't ever purchase anything from Amazon that is edible or goes on my body (cosmetics in particular) because of their counterfeit problem. I also try to buy from best buy or other competitors for electronics. Often the price difference might only be 1% or so.

I'm not sure the average person realizes how bad it's gotten and they have a lot of momentum.

[+] paulpauper|4 years ago|reply
2 delivery companies quit.that leaves 1998 others. This is lower than an employee attrition rate. It is only newsworthy because it involves Amazon and they gave a reason which confirms a popular media narrative
[+] plank_time|4 years ago|reply
The goal is to pay people high at the beginning, get them hooked on the pay, and then squeeze them by lowering pay and they have no choice because Amazon is a monopoly on their services.

Have people not figured this out yet?

That’s how they get you and transfer all the costs out of their hands. I’m surprised there isn’t more of an outrage over this.

[+] MattGaiser|4 years ago|reply
A quick post I wrote with some back of the envelope math on this. I thought back two years ago that this was just an exercise in dumping risk onto entrepreneurs.

https://qr.ae/TWGBfd

[+] heywherelogingo|4 years ago|reply
Amazon is a cess pit in every respect. I use it once in a blue moon if I can't find an obscure item elsewhere, but I mostly abandoned it some years back. Alternatives have raised their game, and aren't regularly appearing in the news for being a cess pit. Everyone knows it's a cess pit (you can't miss the endless stories) but they like the convenience, and are frankly too lazy too look elsewhere, so the inevitable mock shock, disapproval and tut-tutting all comes off as quite insincere - just a little theatrical etiquette.
[+] robertlagrant|4 years ago|reply
I don't think you can infer quality based on an absolute number of negative stories.
[+] mastrsushi|4 years ago|reply
To the American employees complaining about Amazon's ethical practices, just don't work for them. This isn't mainland China, it's not either Foxconn or farm work.
[+] sjg007|4 years ago|reply
This is an interesting analog of the problem retail workers have on shift scheduling and shift changes.

"One day Amazon dictates that you have thirty routes, the next day forty, then the day after twenty. You’re supposed to have enough drivers for back-up while Amazon is lowering pay. Amazon’s actions are unlawful."

Delivery is probably something you want to run in house and not outsource. It opens them up to another group that could push to unionization though which is probably why they went the Uber route.

[+] kingsuper20|4 years ago|reply
That's interesting, I can't say that I've ever seen an Amazon delivery truck. I've only hit non UPS/USPS driver when getting something big that required freight delivery.

I suppose that the article goes in the same pile as the 'how Costco pressures vendors', 'how Walmart beats up it's employees', ranging back to manufacturing companies, traveling farm labor, and block haulers on the pyramids.

[+] jweir|4 years ago|reply
This is having impact. Noticed last night that all orders to Portland had a delivery date of one week out vs the normal two days.