Amazon is cutting costs with its own delivery service — but its drivers don’t receive benefits

If you did any of your holiday shopping online this year, it’s likely you ordered at least one thing from Amazon. In the days leading up to Christmas this year, nearly half of all shoppers who bought products online purchased gifts through the website, lured by the promise of quick, affordable — or in the case of Prime subscribers, free — delivery. And if you’re a regular Amazon shopper in a major city, it’s likely that your packages weren’t delivered by FedEx, UPS, or the US Postal Service, but rather by Amazon Flex, the company’s in-house delivery program.

Amazon has introduced its Flex program to a few dozen American cities, including New York, San Francisco, and Memphis, Tennessee. On its website, the company claims that drivers can make $18 to $25 an hour delivering packages for Amazon and bills Flex as a way for drivers to “[b]e your own boss, set your own schedule, and have more time to pursue your goals and dreams.” But a growing number of reports about Flex suggest that some drivers are subject to low pay, long hours, and dangerous conditions — and that many don’t have as much control over their working conditions as Amazon has led them to believe.

The costs of being an Amazon Flex driver

Anyone with a driver’s license and a working vehicle can sign up to be a Flex driver, provided they make it through the company’s approval process, which includes watching more than a dozen instructional videos and taking a test. Flex drivers are independent contractors in the truest sense: They choose their own shifts, use their personal cars to make deliveries, and don’t work when they don’t feel like it. Other drivers who deliver packages for Amazon, known as Delivery Service Partners (DSPs), work for private courier companies that are subcontracted by Amazon. Austin Murphy, a former Sports Illustrated writer who now works as a driver in Berkeley, California, falls into the latter category.

“When I’m in a rhythm, and my system’s working, and I slide open the side door and the parcel I’m looking for practically jumps into my hand, and the delivery takes 35 seconds and I’m on to the next one, I enjoy this gig,” Murphy wrote in an essay for the Atlantic, published this week, about his trajectory from sportswriter to Amazon contractor. But things aren’t always so rosy. Murphy mentions several instances of customers mistaking drivers for thieves since they aren’t required to wear Amazon-branded clothing. In some cases, he writes, contractors who are unable to find public restrooms while out on delivery urinate in Gatorade bottles.

A lack of suitable places to pee seems to be a common issue among Amazon’s fleet of drivers. In September, Business Insider reported on the conditions these contractors face, including physically demanding work, lack of overtime wages, and, yes, feeling the need to urinate in bottles to make their deliveries on time. At some courier companies, female drivers reportedly kept buckets and baby wipes in their trucks so they could go to the bathroom there.

Like Murphy, the majority of the contractors interviewed by Business Insider worked for third-party companies rather than working for themselves. Some companies pay the drivers daily flat fees that range from $125 to $150; others pay $13 to $15 an hour, which is far below the wages Amazon advertises on its website. At one company, drivers’ daily shifts were more than 11 hours on average. Some of the drivers told Business Insider that they blamed Amazon, not the courier companies, for the conditions. “They get harped on by Amazon,” one driver said, “and it pushes them to act inhuman toward their workers.”

Self-employed Flex drivers seem to get paid a bit more than those who work for courier services, but being an independent contractor comes with its own set of problems. Unlike drivers who work for third-party delivery companies, independent contractors are responsible for all fuel costs and vehicle maintenance incurred while on the road.

When the Atlantic’s Alana Semuels delivered Amazon packages for a day, she found that drivers are on the hook for any parking tickets they get while out on delivery. (UPS and FedEx, meanwhile, pay their drivers’ traffic tickets.) If a driver gets into an accident while delivering Amazon packages, they’re responsible for the costs — not Amazon. And like drivers for some courier services, self-employed Flex contractors aren’t eligible for benefits like health insurance or worker’s compensation if they get injured.

Amazon Flex is a good deal — for Amazon, that is

For Amazon, Flex is a way to reduce delivery costs — a small part of the company’s greater push toward profitability, which also involves culling unprofitable items from its website — while attempting to stick to its promise of two-day delivery for Prime subscribers, of which there are more than 100 million worldwide. Notably, Amazon’s shipping costs have increased by more than 1,800 percent in a decade, according to figures obtained by Business Insider. In 2007, the company spent $1.2 billion on shipping; last year, that number was $21.7 billion. Flex and the DSP program allow Amazon to cut costs by reducing its reliance on FedEx, UPS, and the Postal Service, whose unionized drivers receive higher pay than their Flex counterparts.

Since these drivers are technically self-employed, Amazon isn’t responsible for the types of costs that are usually associated with having a team of workers, like payroll taxes, worker’s compensation, health insurance, or other benefits. According to Semuels’s report, UPS workers make around $36 an hour, compared to the $18 to $25 per hour made by the best-paid Flex drivers. Flex workers, meanwhile, have no collective bargaining power and little, if any, means to advocate for higher wages or more humane working conditions.

Amazon isn’t the only company using freelance labor for its own gain. According to an annual study commissioned by Upwork, a platform for freelance workers, more than 1 in 3 Americans freelanced in 2018. Troublingly, 61 percent of those surveyed said they started freelancing because of necessity, not because they wanted to.

Flex is to package delivery what Uber is to taxis: A fleet of contractors who obtain work through a massive company but are not technically considered employees of said company. Unlike Uber, which requires users to at the very least exchange a greeting with their driver, the labor done by Flex and DSP drivers is nearly invisible. It’s possible to order and receive an Amazon package without ever interacting with the people who deliver it. Amazon Flex isn’t an isolated phenomenon — it’s part of a growing trend toward freelance labor.

Through Flex and the DSP program, Amazon essentially pushes many of the costs — and the liabilities — of delivering a package onto its drivers.

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