Tuesday, November 21, 2017

Driving Amazon's Last Mile (AMZN)

From Gizmodo:
Who delivers Amazon orders? Increasingly, it’s plainclothes contractors with few labor protections, driving their own cars, competing for shifts on the company’s own Uber-like platform. Though it’s deployed in dozens of cities and associated with one of the world’s biggest companies, government agencies and customers alike are nearly oblivious to the program’s existence.

In terms of size, efficiency, and ruthlessness, Amazon has few equals. The least publicly accountable of the big tech companies—Google, Apple, and Facebook face considerably greater scrutiny—Amazon’s stock is one of the most valuable on the market, it’s among the fastest-growing companies in the United States. Atop its vast empire, CEO Jeff Bezos commands the single largest personal fortune on the planet. Estimates place Amazon as the recipient of approximately one third of all dollars spent online. Control over the manufacture, storage, sales, and shipping of an extraordinarily diverse set of products has led the company to expand into film and TV production, web hosting, publishing, groceries, fashion, space travel, wind farms, and soon, pharmaceuticals, to name just a few. It’s a new kind of company, the likes of which the American economy has never before seen and is legislatively ill-prepared for.

Ingenuity alone doesn’t account for Amazon’s dominant position. The company’s Economic Development Team works hard to secure state and local subsidies, which research from watchdog group Good Jobs First indicates surpasses $1 billion, a figure which the advocacy group’s executive director, Greg LeRoy, freely admitted to Gizmodo is far from comprehensive. Infrastructure in the company’s home base of Seattle has strained to keep pace with Amazon’s meteoric growth, and the city has experienced massive increases housing costs. While North America’s metro areas—including Seattle—scramble to offer attractive incentives to host Bezos’s second headquarters, research indicates that when Amazon comes to town, it might be killing more jobs than it creates.
The majority of consumers, however, either don’t know or don’t care. Strip Amazon to its most familiar elements, and it’s a devilishly simple everything-store with limitless stuff-supply. You buy it. It shows up. Fast.

Near the very bottom of Amazon’s complicated machinery is a nearly invisible workforce over two years in the making tasked with getting those orders to your doorstep. It’s a network of supposedly self-employed, utterly expendable couriers enrolled in an app-based program which some believe may violate labor laws. That program is called Amazon Flex, and it accomplishes Amazon’s “last-mile” deliveries—the final journey from a local facility to the customer.

While investigating the nature of the program, we spoke to 15 current or former independent drivers across nine states and two countries whose enrollment spanned between a few weeks and two years, as well as three individuals attached to local courier companies delivering for Amazon. Their identities have all been obscured for fear of retribution.

A great opportunity to be your own boss

To understand the issues faced by the independent contractors handling last-mile delivery for Amazon requires some knowledge of how Flex works.

When Amazon selects one of its facilities—what drivers refer to as a Fulfillment Center* (FC)— for participation in Flex, it blankets Craigslist and other sites with local ads describing Flex as “a great opportunity to be your own boss,” sometimes as many as twelve ads a day. Each FC is distinguished by three letters and a number—DLA5, for instance, refers to Riverside, California—and many of the over 50 cities Flex operates in have more than one.

An interested driver goes through a preliminary screening online and finishes their application through the app, passes a background check allegedly administered by a company called Accurate Background. Accurate Background did not respond to multiple requests for comment and Amazon declined to comment on which companies or services it uses for this purpose, but claimed the check pulls from, among other signals, court records, the sex offender registry, and data analysis from US and global organizations. One driver told Gizmodo he was approved in under four hours. Others wait over a month. According to a Flex contract furnished to Gizmodo, the only requirements to entry are modest: be 21 or older, pass Accurate Background’s vetting, own a smartphone with Flex installed, and have access to a car, bike, or public transportation. No company cars. No uniforms. Just a non-photo ID badge.....MUCH MORE
Related at recode:
Amazon has privately blamed the U.S. Postal Service for grocery delivery issues that led to Amazon Fresh changes

And last week:
Sure, Come On In: "Amazon Key Flaw Could Let Rogue Deliverymen Disable Your Camera" (AMZN)