Last week, two well-established Amazon delivery companies in Portland, Oregon offered Amazon an ultimatum: agree to a set of conditions that it said would improve revenue and driver safety—or we'll stop delivering Amazon packages.
Amazon refused, and the two companies in the Portland area terminated their contract with Amazon, their only client, effectively shutting down.
"Amazon’s conduct over the past two years has become intolerable, unconscionable, unsafe, and most importantly, unlawful," a letter sent to Amazon by the attorney of the two delivery companies, Triton and Last Mile and obtained by Motherboard, reads.
The incident is notable as it appears to be the first public example in the United States of Amazon delivery service partners, small businesses that deliver packages exclusively for Amazon, using their leverage to protest against Amazon—which has been known to enforce strict rules that squeeze productivity out of their delivery drivers, putting drivers and the public at risk.
Amazon's delivery service partner program, which launched in 2019 to compete with FedEx and UPS, relies on 2,000 small delivery companies that employ 115,000 drivers in the United States to deliver billions of packages each year. Delivery service partners are responsible for paying drivers and assume liability for all aspects of the operations—shielding Amazon from scrutiny and responsibility. Delivery service partners are not owned by Amazon, but deliver packages exclusively for the company, and have to adhere to a strict set of rules from Amazon around hiring, pay, delivery times and routes, and more.
"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."
To date, there are few recorded instances of Amazon delivery drivers in the United States collectively protesting against Amazon—though drivers in one warehouse in upstate New York staged a walkout during the pandemic, and last week, the Teamsters union announced a coordinated national effort to unionize Amazon employees, in particular its delivery drivers.
In their letter to Amazon, the two Portland companies outlined a series of grievances, such as cutting routes from delivery companies without notice, unevenly distributing workloads among drivers, lowering reimbursement for drivers' wages, accessing their employee's records and personal information, and firing their drivers without input from delivery companies. Amazon frequently changes rules on a whim without notifying delivery service partners, the letter alleges.
In recent days, Rask said he's received an outpouring of phone calls from Amazon delivery service partners around the country asking him for legal advice on how and whether to shut down operations because of Amazon's predatory business model.
The Portland delivery service partners' letter to Amazon outlines a set of demands as a condition for doing business with Amazon again, including a limit on packages and stops, a 8.5-hour cap on delivery routes, a commitment to at least 40 routes per company, and $20 per hour per driver. (Drivers earned $18 an hour until last week's layoffs.) The companies are also requesting $36 million to compensate laid off drivers and for damages to both companies. Until Amazon agrees, they will not do business with the company, the letter to Amazon obtained by Motherboard states.
"At one point both companies had 150 employees," Rask said. "Amazon's actions killed these companies. They were the best performing in Portland and then they were crushed by Amazon’s arbitrary and improper behavior.”
Kate Kudrna, a spokesperson for Amazon, emphasized that the two companies were putting their drivers at risk by shutting down. “Last week, two Delivery Service Partners abruptly threatened to stop servicing the Amazon account and jeopardize the livelihood of their drivers if we did not pay them $36 million within 48 hours along with a string of other demands," she said.
"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.”
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. The two Portland delivery companies are demanding a cap at 250 packages and 150 stops per 8.5 hour route. As Motherboard has previously reported, in order to qualify for bonuses and complete their routes on time to avoid discipline, drivers have been forced to suspend safety monitors, run across busy four-lane highways, skip lunch breaks, and pee and defecate in their vans rather than find bathrooms.
The letter says that Amazon forces its delivery companies to commit to routes three weeks in advance but Amazon can change drivers' schedules within a day or less than a day's notice. This forces scheduled drivers to show up to work without actual work to do, and companies to pay drivers' wages for days when they didn't deliver packages.
A new program also allows Amazon to increase or decrease routes each day by 10 percent without any advance notice to delivery companies—forcing them to eat the cost of extra scheduled drivers, according to the letter. Under Oregon law, delivery companies must pay drivers for their scheduled hours even if the work is unavailable. In such cases, Amazon forces their delivery companies to pay drivers' wages, the letter states.
"As a result of this one-sided arrangement, Last Mile and Triton must commit employees to Amazon in advance, while Amazon can save costs when it experiences low inventory or labor shortages at its warehouse by suddenly changing or reducing routes when it no longer needs those drivers," the letter states. "Meanwhile, Last Mile and Triton must still pay those drivers who committed to the routes, with no reimbursement from Amazon."
Amazon frequently touts its commitment to paying its employees higher wages than its competitors, but the letter also outlines the ways in which Amazon actually drives down wages in package delivery and leaves it up to small delivery companies to pay the market rate.
According to Triton and Last Miles' letter to Amazon, Amazon agreed to reimburse the delivery companies for drivers wages as part of their contract. Amazon agreed to pay drivers $17.25 an hour, but the two companies had to raise the rate to $18.00—the actual market rate for drivers in Portland. Amazon did not make up for the extra 50 cents.
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. This meant Amazon delivery companies were paying even more for drivers' wages.
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 in Bessemer, Alabama. In Portland, Amazon raised rates from $16.00 to $17.50 an hour, but Amazon delivery drivers at Triton and Last Mile were already making $18 an hour, meaning they didn't qualify for Amazon's raise. "Last Mile and Triton had to inform their entire staff of drivers that they would not be able to increase wages, despite Amazon’s announcement," the letter states.
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The letter states that Amazon distributes packages to drivers unevenly on the same 10-hour shifts, pushing some drivers to complete their shifts with more packages in ten hours to qualify for bonuses, pushing them to drive faster, presenting a danger to both drivers and the public.
"Amazon may assign one driver 300 packages to deliver, while assigning a different driver 200 packages to deliver," the letter states. "The difference in package count does not correspond to the difficulty or challenges associated with a particular route. Consequently, in order to fully complete Amazon’s required routes in a single day, drivers must often work 12 hours a day, but Amazon only reimburses for a 10-hour shift."
Rask, the delivery partners' attorney, says both companies will be filing a lawsuit against Amazon with similar allegations shortly.