Amazon.com has come up with a new way to ensure packages arrive safely on customers’ doorsteps — it is incentivizing entrepreneurs to launch their own delivery businesses.
Citing comments Amazon made at a press event in Seattle, Washington, Reuters reported Amazon said it wants to lease vans with the Prime logo on them to delivery businesses, offering what it claims are attractive terms. Amazon would provide the business with uniforms, fuel and insurance plans for fleet operations and provide training on everything from taxes, payroll, and other small business topics. The branded vans would only be allowed to be used for deliveries for Amazon. Qualified entrepreneurs can launch a delivery business with Amazon for just $10,000. That doesn't include any costs associated with hiring drivers, noted Reuters. “A 40-vehicle fleet could earn as much as $300,000 a year in profits,” said Dave Clark, Amazon’s senior vice president of worldwide operations, according to Reuters. Clark noted Amazon expects that an operator with 20 to 40 vans would have to hire 100 drivers. Details about the incentives were not disclosed, noted the report.
As for Amazon’s Flex program, in which drivers get paid to deliver products using their own cars, Clark said that program will continue but doesn't solve all of Amazon’s last mile delivery headaches. “Flex is all about leveraging available capacity,” said Clark, noting that adding new delivery operators into the mix will increase its scale by a lot. “We looked at our history with small business (on its platform) and we said we can do the same thing in last mile and people can own a manageable-sized business.” If Amazon's new program proves successful and entrepreneurs clamor at the opportunity, it could put more pressure on UPS and Fedex, the main deliverers of Amazon products. Amazon rivals have also been testing new ways to deliver goods. Walmart had been testing grocery deliveries with Uber and Lyft but ended the partnership. It also offered to pay employees to deliver groceries on the way home from work and is now working with DoorDash and Postmates, noted Reuters.