According to Vice, the owner of a small delivery firm in Minnesota received an email from Amazon in September threatening to terminate the company’s contract to deliver products for the e-commerce giant. According to the email, the firm has failed to meet Amazon’s route quotas.
“Amazon hereby notifies your company that your company is in breach of certain requirements of the Program Agreement,” the email said. “If your company fails to cure the breach, Amazon may terminate the Program Agreement and end the business relationship between Amazon and your company.” (The “program agreement” is the contract Amazon keeps with its 2,000 third-party delivery companies nationwide.)
Amazon stated that in order to fix the breach, the corporation required to meet 100% of its route assignments for four weeks in a row by December 16.
For the proprietor of the Amazon delivery service, this news was a nightmare. They’ve been struggling to meet route targets in recent months due to issues attracting and retaining delivery drivers with the cash they receive from Amazon amid a nationwide labour crisis, they added.
“Trying to hire right now in Minnesota is absolutely terrible,” the owner of the Amazon delivery company said. “Even Amazon can’t find people. We’re running as many routes as we’re capable of, but we can only run as many as we have employees.” Because they anticipated repercussions from Amazon for speaking to the press, the owner requested anonymity.
Although Amazon delivery businesses are legally independent from Amazon, they are functionally limited in what they can pay by what they make from Amazon. They receive a certain amount of cash from Amazon every delivery route, therefore they are functionally limited in what they can pay.
Owners of Amazon delivery companies, known as delivery service partners, are struggling to find workers around the country and have recently received similar letters from Amazon threatening to fire them. This news demonstrates how Amazon holds enormous authority over its delivery companies, which they claim are self-contained enterprises.
Despite the fact that delivery firms lack the capacity to make their own commercial decisions, they invest their own money and assume a significant amount of risk, knowing that Amazon can cut them off at any time. Another Amazon delivery firm sent Motherboard a letter that was remarkably identical.
The delivery companies had received “breach of contract” notifications because they failed to complete 80 percent of the routes allocated to them by Amazon over a four-week period in August and September, according to the letters accessed.
These delivery companies’ sole client is Amazon, and a contract termination would practically put them out of business. In the email, Amazon also warned that the companies would be placed in “poor” status and would be ineligible for bonuses until the “breach” was “cured.”
Even if the breach was “cured,” Amazon stated that the “breach of contract” would be taken into account when deciding whether or not to renew the delivery company’s contract in the future.
In response to a request for comment, Maria Boschetti, an Amazon spokesperson, told Motherboard, “We offered to fact-check the sources in Ms. Gurley’s(writer of this source article for Vice) article, but she declined us the opportunity to do so. Unnamed sources make it difficult to validate the veracity of claims and don’t present a full or accurate picture.”
According to Boschetti, 97 percent of his delivery businesses routinely match route standards, and the company has “almost 2,000 DSPs in the US, employing 115,000 drivers.” If 3% of enterprises fail to satisfy expectations on a regular basis, it implies around 60 businesses are affected.
“The assertion that we are “threatening to terminate” the contracts of Delivery Service Partners that are facing hiring challenges is simply untrue,” she continued. But the claim Motherboard is making is true, and is based on letters Amazon itself sent to companies that say they are struggling to hire workers.
“In fact, we have invested hundreds of millions of dollars this year alone to help DSPs around the country increase driver wages and offer financial incentives to attract drivers to their small businesses,” Boschetti continued. “When a DSP is not meeting the program’s expectations, we first work with them to provide additional support and only in the rare situation where they continue to consistently not meet expectations do we notify them of the risk to their program agreement. We’re proud to work with thousands of passionate and innovative entrepreneurs in our DSP program and are grateful for the positive impact they have on our communities and customers.”
In 2018, Amazon announced the “delivery service partner programme,” which allows entrepreneurs to start their own delivery companies for as little as $10,000. Amazon was able to lessen its reliance on UPS and the US Postal Service, which don’t deliver on Sundays, and speed up delivery times while lowering its responsibility for delivery drivers, thanks to the programme.
Amazon’s tight control over its delivery businesses frequently translates into pressure on its delivery drivers. According to Motherboard, Amazon delivery businesses have encouraged workers to skip breaks, bypass safety precautions, even pee in bottles and bags in order to complete their routes on time, putting the public at risk. Two delivery firms in Portland, Oregon, sued Amazon this week, alleging, among other things, that the company lied about wages and exposed drivers to harm.
The most challenging part of the year, according to Amazon delivery company owners, is still to come. Amazon delivery businesses are expected to aggressively ramp up their routes during ‘peak season,’ the time between Black Friday and Christmas.
“I have up to December 16 to cure the breach,” the delivery company owner in Minnesota said. “I’m working my tail off to do that.”