Amazon is Ubering out.
The nation’s dominant online retailer has quietly jumped into the the “gig” economy with a program that is tapping into a network of independent contractors to deliver merchandise to customers’ homes — often within an hour or so.
The program is called Amazon Flex. Couriers sign up for shifts through an app and from there report to mini-warehouses where they secure the goods. A hop, a skip and a jump later, the courier delivers to the customer and has earned about $20 an hour for the work.
“There is a tremendous population of people who want to work in an on-demand fashion,” said Dave Clark, senior vice president of worldwide operations. “This is another opportunity for people to work with the company.”
More than an opportunity for workers, this arrangement gives Amazon greater control over its goods deliveries. Amazon saw its shipping costs grow by a staggering 31 percent last year — outstripping revenue and pushing the company to find new and better ways to contain those costs.
However, the on-demand market for labor is not without controversy. Labor leaders, union reps and legislators have recently questioned if the “independent contractors” that provide services on demand for firms like Uber are essentially being systematically miscategorized by their employers and should instead be treated as full-time employees (thus entitled to benefits and other protections).
For now, Amazon is early to that debate. Flex is part of the Prime Now service currently operational in 13 cities. It is only operational in Seattle, though; Clark said he expected to expand to the other Prime cities shortly. Though no official word as to where it is going next is out, Miami was one speculated-upon destination.
“Same-day and same-hour delivery have the potential to open an entirely new retail segment to Amazon — the instant gratification market,” he said. “Traditional retailers have historically enjoyed in-store pickup as a competitive advantage over Amazon — that advantage is slowly going away.”
As for the recent emerging complexities swirling around the on-demand workforce, Clark seems unperturbed.
“We feel very confident in our approach,” said Clark. He said he expected “serious people who want to do a good job” to apply for the service.
Amazon will conduct background checks on applicants using an Irvine, California firm called Accurate Background Inc.
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