Amazon ‘Delivery Partners’ Hit Amazon With $15 Million Lawsuit

Two Amazon delivery companies in the Portland area sued Amazon Monday, claiming that the e-commerce giant controls nearly every aspect of their business and penalizes them for circumstances beyond their control. The companies are seeking $15 million in damages.

The suit alleges that Amazon committed fraud and violated Washington’s laws protecting consumers and franchises. (The companies deliver in both Oregon and Washington.)

The lawsuit contains a list of more than 80 allegations—claiming that Amazon controls its delivery companies, known as delivery services partners, and uses them as a shield against lawsuits and financial losses—which in turn puts drivers’ and the public’s safety at risk. 

“The [delivery service partner program] was carefully designed to allow [Amazon] to shift costs and liabilities onto [delivery service partners], while maintaining complete control over [their] operations, drivers, and ability to succeed,” the lawsuit reads. 

Amazon allegedly punished the two Portland companies for packages that could not be delivered because of bad cell reception in rural areas, penalized the company for routes that Amazon cancelled at the last minute, and packages that weren’t delivered because  businesses were closed on the weekends. Amazon also allegedly disciplined drivers because they left packages outside residents’ gates because a dog was present, even though doing so complied with Amazon’s own rules. 

In July, Motherboard reported that the same two delivery companies in Portland shut down in a rare act of protest against Amazon—which relies on more than 2,000 third-party delivery companies, known as delivery service partners—to deliver packages from last mile Amazon delivery stations to customers’ homes.

"Amazon’s conduct over the past two years has become intolerable, unconscionable, unsafe, and most importantly, unlawful," a letter that the attorney of the two delivery companies wrote to Amazon at the time, said.  

Amazon did not immediately respond to a request for comment, but in July told Motherboard that "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." 

"We refused their demands and they followed through with their threat, terminating their contract with us, leaving their employees confused and looking for answers," the Amazon spokesperson 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.”

Amazon delivery service partners are technically independent from Amazon and hire their own drivers, but are controlled by agreements crafted by Amazon that require them to heed to Amazon’s strict policies and rules and deliver exclusively for Amazon. 

The new lawsuit against Amazon alleges, as has been reported elsewhere, that Amazon maintains control over the hiring and firing drivers, drivers’ appearances, including fingernails, clothing, body odor, and hair; the make and model of the vans they drive; the number of packages each company delivers every day; and the surveillance cameras installed in their vehicles, to name just a few things. 

Despite Amazon’s insistence that it pays its workforce a living wage, drivers’ pay has also been an issue, the suit alleges. According to court documents, Amazon agreed to reimburse the two Portland delivery companies for drivers’ wages, but lied to them about the market rate for wages for delivery drivers in the Portland area. Amazon offered them $17.25 an hour instead of the market rate of $18 an hour, forcing delivery companies to absorb the extra cost. 

The suit alleges that in April, Amazon lowered their reimbursement for drivers to $16 an hour, then a month later made national headlines by announcing a raise for delivery drivers to $17.50 an hour. Yet the whole time, companies had to pay drivers $18 an hour, the market rate in Portland, and absorb the extra cost that Amazon didn’t pay. 

“Because [Amazon Logistics’] 'increased' reimbursement rate was significantly lower than the actual market rate in Portland, [delivery companies] had to inform their entire staff of drivers that they would not be able to increase wages, despite [Amazon’s] announcement,” the lawsuit says. 

The lawsuit also alleges that Amazon’s rules and excessive delivery quotas exposed drivers to injuries. “Amazon logistics’ unreasonable requirements resulted in numerous injuries to Plaintiffs’ drivers, including back injuries resulting from [Amazon]’s fast paced load-out requirements at the warehouse and falls and strains from rushed deliveries. The rushed deliveries also put the public at risk.” 

Last month, Motherboard reported that AI-powered cameras installed in Amazon vans were wrongly penalizing Amazon delivery drivers for driving infractions, such as tailgating and distracted driving, that they did not commit. 

Motherboard has also reported that Amazon’s pressure on delivery companies has pushed them to tell drivers to turn off their ‘safety’ app in order to meet delivery quotas. Meanwhile, Amazon told Motherboard that it has a process for blacklisting threatening and racist customers from its drivers’ delivery routes, but our investigation found that it doesn’t always do so.