Amazon is one of the largest and most popular e-commerce companies in the world. With its massive customer base, Amazon is constantly looking for ways to make delivery faster and more efficient. To do this, it relies on the hard work of hundreds of thousands of delivery associates. But who do these Drivers actually work for?
The answer is, surprisingly, not Amazon. While Amazon is the company behind 10 million packages that get delivered each day, Drivers of the blue vans are not actually employed by Amazon. Instead, drivers are employed by companies called Delivery Service Providers (DSPs). DSPs are independent small businesses that Amazon has contracted with to manage its deliveries.
How does it work?
When a customer places an order with Amazon, the company contracts with a DSP to pick up the package from one of its many country-wide fulfillment centers and deliver it to the customer's doorstep. The DSP is responsible for hiring, training, and managing its own drivers.
Why does this benefit Amazon?
From Amazon’s perspective, contracting with DSPs is a cost-effective way to manage its delivery needs. By outsourcing delivery to DSPs, Amazon can avoid the costs associated with hiring and managing a large number of employees. It has also allowed them to expand package delivery rapidly in regions that may have been difficult or expensive to service through third party delivery companies such as UPS or Fedex.
How does this impact Drivers?
While Amazon may not directly employ its delivery drivers, the company still plays a significant role in their day-to-day operations. For example, Amazon provides the DSPs with access to its logistics and tracking systems, as well as its customer service support. Amazon also sets performance standards for the DSPs, and it monitors their compliance within these standards. This means Amazon can require disciplinary action to be taken against drivers who fail to meet standards.
In addition, Amazon determines rates for delivery routes. So while technically Driver pay is the responsibility of the DSP, how much they can afford to offer employees (while still having a profitable business) is heavily impacted by Amazon’s service rates. Because Drivers are not direct employees of Amazon, despite the many factors linking their job and pay, and so Amazon is not responsible for any additional benefits (such as healthcare, retirement, etc.) It’s worth noting that Amazon does provide DSPs with a limited number of programs geared at benefiting Drivers (such as a small continuing education reimbursement, etc.).
What should customers understand?
Customers may want to consider that Drivers are employees of small locally-owned businesses. Drivers often work long hours and deal with challenging conditions, including bad weather, difficult-to-access locations, and heavy workload. Furthermore, because they are employees of small businesses, they may not receive the same level of benefits and protections as traditional corporate employees.
Tipping can be a simple way for customers to show their appreciation for the hard work and dedication of their Amazon delivery drivers. It can also help to offset the lack of benefits and job security that many of these drivers face, similar to why we tip most of our other service industry employees. DRIVR is making it simple to tip your Amazon Drivers with our secure, automated cashless tipping.