Amazon has announced a pay increase for its contracted delivery drivers, bumping their average national wage from $20.50 to $22 per hour.
The hike is part of the company’s $2.1 billion investment this year into its Delivery Service Partner (DSP) program. This oversees third-party firms responsible for last-mile delivery from Amazon warehouses to customers.
This wage increase comes at a crucial time as Amazon faces intensified efforts to unionize its contracted delivery workforce.
Beryl Tomay, Amazon’s vice president of transportation, emphasized in a blog post many delivery service partners (DSPs) already offer wages above $22 an hour. He said the company is committed to supporting these firms in retaining and recruiting top talent.
Increased Pay Amid Unionization Push
The announcement coincides with Amazon’s Ignite Live event, a closed-door annual conference for DSPs, held this year in Las Vegas. Last year, Amazon also revealed a pay bump during the same event.
Since launching the DSP program in 2018, Amazon has partnered with over 3,500 delivery contractors, and the company is continuing to scale its last-mile delivery operations.
However, Amazon’s relationship with its DSP workforce is under scrutiny from labor groups and regulatory agencies. The Teamsters Union has been at the forefront of organizing efforts. It has led strikes at several Amazon delivery facilities over the past year.
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NLRB Determinations on Amazon’s Role as Employer
Amazon’s pay increase follows two recent determinations by the National Labor Relations Board (NLRB) that have raised questions about the company’s role as a joint employer. The NLRB found Amazon should be considered a “joint employer” of workers at two subcontracted delivery companies.
This ruling, if upheld, could compel Amazon to engage in collective bargaining with delivery workers seeking union representation.
Amazon has consistently argued that its delivery drivers are employed by independent third-party companies and not by Amazon itself.
However, labor groups and lawmakers dispute this characterization. They point out drivers wear Amazon-branded uniforms, operate Amazon-branded vehicles, and adhere to performance standards set by the company.
Amazon’s Response and Future Outlook
Despite the NLRB’s findings, Amazon has stated that it disagrees with the rulings. The company has resisted efforts to categorize it as a joint employer. It maintains its relationship with contracted firms does not extend to direct employment of delivery drivers.
The ongoing scrutiny from labor groups and the NLRB suggests the company may face further legal and regulatory challenges regarding its labor practices.
As Amazon increases wages and continues to grow its DSP program, the pressure from unions and regulatory bodies could reshape the future of the company’s delivery network.
Whether the wage hike will ease tensions with contracted drivers or further embolden unionization efforts remains to be seen.
Looking Ahead: Labor Relations and Competitive Edge
The wage increase is a clear move to address worker retention and recruitment amid heightened scrutiny, but the underlying challenges related to labor relations persist.
As Amazon navigates its role within the evolving gig economy, the outcome of unionization efforts and regulatory battles will likely play a significant role in shaping the company’s labor strategy moving forward.
