Name: Amazon DSP drivers reveal the challenges of one-day shipping
Uploaded: 2021-06-30T06:24:37.000Z
Duration: 23 min 10 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

What's going on? It's your girl Shaleen the Queen coming to you guys with a video of the day in the life of an Amazon delivery driver. I have 113 stops

today. So I'm going to start with this one. Then I go up, then down, up, down, up, down, up, down.

Adverbs of manner

Delivering packages for the world's largest e-commerce company is a monumental job, especially with this month's annual Prime Day sales event.

I've been tired, exhausted long days. Shaleen Williams, and 115,000 other drivers are part of Amazon's solution to the most expensive part of a

package's journey, getting it that last mile to customer doorsteps.

This is where I used to load out. 210 right there.

We spoke with current drivers and took a ride with former driver Adrienne Williams to see where she delivered for Amazon from November 2019 to July

I would average between like 150, 180, somwtimes 190 packages.

Since 2018, Amazon has been building out its network of these independent contractors - Delivery Service Partners or DSPs. With more than 2,000 of

them across the U.S. now DSPs helped Amazon reach notoriety for extremely fast shipping.

There's a lot of aspects of the job that are really enjoyable. You get a lot of exercise. The customers are really happy to see you.They're getting

whatever the heck they ordered. But there's things that need to be fixed.

From urinating in bottles to running stop signs, routes that lead drivers to run across traffic, dog bites and cameras recording inside vans at all

times, DSP drivers have voiced big concerns, largely tied to the relentless workload required to meet Amazon's one-day shipping promise.

The expectation is just go go go go go at your own cost.

Historically, Amazon relied heavily on UPS, the Postal Service and to a lesser degree FedEx for the heavy lift of last-mile delivery

It was 2013 they had a holiday season was a fiasco in terms of late and missed deliveries. A lot of it had to do with weather. A lot of it had to

do with Amazon dumping massive amounts of volume at the last minute on UPS and to a lesser extent FedEx. But it was at that point that Jeff Bezos said

we can't entrust this business entirely to other people.

So Amazon built an in-house network called Amazon Logistics. It's grown to include everything from semi-trucks to Amazon  Air planes, individual Flex

drivers, and since 2018, fleets of vans run by Delivery Service Partners or DSPs.

Amazon pretty much has control over the operation. It's Amazon's vans, it's Amazon's insurance, they're providing it at a discount. Amazon wants

entrepreneurs, they need drivers they want to control as much of the delivery processes as they can.

These small contractors allow Amazon to oversee deliveries in regions all over the country without directly hiring any employees.

Amazon fights tooth and nail to maintain the status quo that these are contractors. They're not employees because if they are employees, then

you've got to pay them benefits. You've got to pick up their expenses for uniforms, trucks, what have you. And then Amazon's cost structure changes.

And if Amazon's cost structure changes, so will yours,.

They have a built up their operation very, very quickly, largely because they were able to do build a last-mile network using third-party DSPs

instead of having to go out and hire all these people and put them on the books themselves.

Amazon Logistics also allowed Amazon to avoid paying outside carriers for the majority of shipping. Amazon now delivers nearly two-thirds of its own

packages through its logistics programs like DSP.

We estimate that Amazon roughly spends in a $3.50 to $4 a box to deliver. This compares to UPS and FedEx's average revenue per unit at about $10 to

$12. So we think it can be a meaningful savings to Amazon to do this themselves.

Control over its own deliveries allowed Amazon to make one-day shipping the norm in 2019. Although the pandemic caused significant shipping delays, the

number of Prime members recently reached 200 million. Since the early days of Amazon Logistics bigger independent logistics companies have also been

under contract to deliver for Amazon. But in 2018, Amazon went after a wider regional reach by launching the DSP program with special deals for

small businesses with fleets of 20 to 40 vans and 25 to 100 employees. To get the program off the ground. Amazon purchased 20,000 dark blue Mercedes

Sprinter vans to start, leasing them to DSPs at a discount. It offered $10,000 grants to existing Amazon employees, Black, Latinx and Native

American entrepreneurs and military veterans trying to launch a DSP. The DSP model is separate from Amazon Flex and even smaller business model in

which independent gig workers make between $18 and $25 an hour driving individual routes on demand. Unlike Flex drivers, DSPs have Amazon provided

discounts on things like fuel, insurance, uniforms and electronic package scanners, known as Rabbits. The DSP is responsible for almost everything

else, from maintaining the vehicles to hiring drivers and providing pay, benefits and overtime.

It's cheaper, it gives them more flexibility, they don't have work rules to abide by. If you as a contractor want to provide benefits to your drivers,

go ahead. Amazon will not do that. Amazon offers terrific deals to people. One of the reasons they're able to do that is they don't have the cost

From washing vans to replacing vans to paying for workers that get hurt, they can put it on a DSP owner, and they don't have to pay for it.

While UPS, FedEx and the Postal Service directly employ drivers, Amazon's contractor model isn't unique. While Amazon has about 2,000 DSPs, FedEx

Ground has around 7,500 of what it calls Independent Service Providers.

What Amazon's doing is a little bit different, in that they're using DSPs that are also kind of professional delivery companies but maybe a little

more mom and pop and a little smaller in nature.

The DSP is responsible for recruiting and hiring drivers.

Fast pace, you're not really dealing with anybody. You're doing it by yourself with the occasional manager or boss calling you, telling you

something that you have to do. I mean, I guess I'll say Amazon's the best job I've ever had, so far.

Drivers pick up their vehicles at a designated lot or Amazon warehouse, then line up and drive in to load up with boxes organized into color-coded

All my bags are over here. And then I have my oversize over here mainly on the shelves, and I got some on the floor.

Each package is labeled with yellow stickers that assign them a chronological order for drop-off.

I normally always sort my first bag while I'm just waiting. And that helps me, like, when I get to my first couple of stops, everything's already

sorted. So I don't have to go through and re-sort everything and take more time when I'm actually on the clock.

Some DSPs also have the bigger walk-in style delivery trucks like those used by UPS. Jackie Nash drives one of those for a DSP in Richmond,

California. She wasn't comfortable appearing on camera.

It's so much bigger, it's more room, you can spread your packages out. In the van, you have to stack th packages. It's way harder.

DSPs also lease unmarked white vans for their drivers, although these don't have shelves.

Anytime you stop, any time you turn, all your packages will just fall all over the place on the ground, and then you're done. And then you're just

rummaging through things. And then that also lends the problem of slowing you down.

Amazon sets the routes and delivery loads of up to 400 packages per driver per day using the Flex app.

I have left 111 packages. So if I click on this map, you can kind of see my route for today.

Amazon estimates it costs as little as $10,000 to start a DSP. Amazon pays the DSP per route and says annual profits can range from $75,000 to

$300,000. But the DSP business can be a tough one.

Amazon is not about making money for anyone but Amazon. It's very hard for a contractor to generate a lot of profit based on what Amazon is charging

per parcel. And also the workload is very, very intense, you know, 10, 12, 14 hours a day. A lot of stops. A lot of deliveries.

CNBC reached out to several DSP owners, although none would talk on the record. Despite requests Amazon also did not provide interviews with DSP

owners or drivers. During the pandemic, Amazon sales have smashed earnings expectations, and it's hired more than 400,000 people. But DSPs didn't

always share in the success. Some turned to federal aid to make it through, receiving at least a million dollars from the Paycheck Protection Program.

But the pandemic was certainly a popular time for drivers to join the program, like Shaleen Williams who started driving in April last year.

So I just debrief from my route today and Amazon has some snacks out for us.

One October 2020 survey of 1,500 delivery drivers found that 63% joined in the last six months. According to Indeed.com. Amazon driver pay averages

around $18 an hour, about $1.50 above the national average. Shaleen Williams makes $15 an hour. Adrienne Williams made $20 an hour. Jackie Nash

makes $20.25 an hour. Nash is trying to get a job at UPS.

They pay way more. They top out at $38. They get raises every six months. They do not slave you with all these packages and they're union. Who does

not want to work for a union? And their benefits are excellent.

UPS drivers belong to the Teamsters. Meanwhile, union presence at FedEx is minimal. Because DSPs are contractors, it's hard for them and their drivers

You will never have Amazon approach the same model as UPS does because Amazon would have to price prime at like $250 per person. Not being subject

to union work rules, union wages, gives them a lot of flexibility to pivot on a dime and they do.

The arm's length relationship also gives Amazon the power to sever the contract with a DSP or a driver at any time. This provides Amazon some

insulation from the inevitable risks of the shipping industry like botched deliveries, accidents and even deaths. In 2016, an Amazon driver struck and

killed an 84-year-old grandmother in Chicago. Her family brought a lawsuit against Amazon and the contractor alleging that Amazon put excessive

pressure on drivers to deliver on time. Two more deaths occurred in 2018.

The little corners that you cut are very dangerous for both you and the community around you. People are busting their ass driving way over the

speed limit. People are running through stop signs, running through yellow lights. Everybody I knew was buckling their seatbelt behind their backs

because the time it took just to buckle your seatbelt, unbuckle your seatbelt every time was enough time to get you behind schedule.

A 2019 ProPublica report found Amazon's contract drivers were involved in more than 60 serious crashes since 2015, at least 10 of which were fatal.

In court Amazon has repeatedly said it's not responsible for the actions of its contractors. Delivery is also an inherently dangerous business for

drivers from any company. Of the 5,333 occupational deaths in the US.. in 2019, more than 1,000 of them were drivers. According to one report by a

labor union coalition that analyzed data from the Occupational Safety and Health Administration, Amazon DSP workers experienced severe lost time

injuries at nearly three times the UPS rate in 2020. Amazon holds mandatory safety meetings for all warehouse employees before each shift. But

outsourcing driving to DSPs takes away Amazon's ability to control these kinds of day-to-day operations. Instead, it relies on technology. Amazon

tracks safety metrics with its Mentor app, which scores drivers on behavior like speed, braking and use of mobile devices. It uses collective driver