What about liability? How much Insurance are the drivers required to have. Lawyers always go after the person/company with the most money. A Uber driver with the minimum amount of liability insurance may not be covered enough. In a lawsuit, will Uber or Amazon be able to make a case that these drivers do not really work for them? Uber sets the rate, and collects the fare.
I know if I get hit by an Uber driver, I'm going after Uber.

 

"Should something occur during the period when the individual is delivering on behalf of Amazon, we provide" insurance that includes $1 million in commercial automobile liability coverage per incident, and $1 million in uninsured/underinsured motorist coverage per incident if the other motorist doesn't carry adequate insurance, she said.

 

Thanks for this info.Where did you see this? I don't know who "she said" is. I did not see this in the FAQ's. Is this something Amazon has in a contract that individuals sign?

 

How could this be a good plan? I can think of several reasons why.

Security: Who wants an unknown person in an unknown vehicle coming to their home or business? Do Amazon drivers have a company ID? Are they allowed to have Amazon logos on the vehicles? I would say the answer to those is "no", otherwise they become an employee of Amazon. They're contractors, even though on the Amazon Prime Now website they have fancy uniforms. (employee status will be challenged at some point)

Reliability: One of Amazon's biggest problems is matching shipping capacity to consumer spending. Several years in a row, massive amounts of shoppers decided to buy last minute before Christmas, leading to an overloading of the shipping networks because Amazon sold above their contractual shipping agreements. How will Amazon know how many drivers will be working on any given day? When the weather is bad and nobody wants to drive their own vehicle, what does Amazon do? Amazon won't have FDX or UPS to blame as their scapegoat.

Costs: Part of the problem with Amazon shipments is that they are low profit yielding shipments but they have very high cost due to the "last mile" of shipping. FDX and UPS have said publicly many times that eCommerce helps diversify their business, but it adds significant costs. In business to business freight, a UPS or FDX delivery driver may deliver multiple shipments or even an entire truck load, leading to efficiency. Whereas, eCommerce or business to consumer shipping adds significant costs because of the distance between deliveries and many of those packages yielding little profit.

This is what I see Amazon Flex coming into play. Amazon is going to pass those costs off to the drivers. For example costs like being an owner operator of a vehicle, insurance, wear and tear, fuel, fees or tolls, etc.etc..

Expectations: People using Prime already pay a fee and don't want to pay additional fees or tips (see below). In fact, judging from the reviews, they're very angry about this. Free shipping is free right? Perhaps Amazon has started the Napster syndrome for shipping and eCommerce?

Notice the word usage "commercial" automobile liability. Almost all private automobile policies do not cover "ride sharing" or working for hire. You have to get a commercial plan or gap insurance for that. I am willing to bet that many Uber and Amazon drivers don't know that. Uber and Amazon probably want it that way. $1 million dollars of commercial liability is not enough, not today. I am willing to bet your insurance pays first, then Amazon's. And I wonder what liability Amazon has in this? (Zero) Are they the Continental in Continental Express -- limited liabilities because they contracted with you the driver? And the liability is all pushed to you?

I've been reading Amazon's Prime Now online reviews. They're not bad, but they're not great either. People DO NOT like pay a tip or being suggested to pay a tip for a service they feel they already paid for. People don't tip FDX or UPS, so why should they tip Amazon delivery people? Are the tips above the $18-25/hour wage?

More importantly, read this drivers comments on Amazon Prime Now...

"I thought I would write a review from the drivers side to answer questions in regards to tipping, delivery notes. Etc.

1. Tips. We are independent contractors. We DO get an hourly wage that's decent. But by time we pay for gas, wear and tear on our vehicles, etc. That eats up a nice chunk of it. We don't get health insurance, paid vacations, etc.Do all deliveries warrant a $5 , no. Use commonsense. If it's a light bag, you live close to the warehouse. All I have to do is drive up to your house, get out drop and leave. $2 to cover gas is cool. If you live on a 3rd story apartment and I'm carrying a 30lb bag of dog food,cases of soda , making multiple trips back to my car.. it seems that it would be worth tipping generously for that so you don't have to do it yourself. Also you can go back in and adjust your tip. If the driver was there fast, polite, tip as you feel you should. If the driver was late for no good reason (sometimes we do get stuck in traffic because of an accident, but you can look on your app and see if we are inching down the highway or something) or rude, etc. Then go in an reduce your tip. We don't see our tips until 48 hours after delivery (so that you can adjust your tips as you see fit) so no we won't mess with your packages if you don't tip. However we are highly motivated by the potential of the customer being so pleased by our service that they will go back in and increase our tip. I'm always fast and friendly. I've carried TVs up 4 flight of stairs. Stopped and caught my breath so that I could knock on the door and present the TV with a smile on my face and act like it wasn't the monumental task that it was. If I was consistently seeing people not tipping it would be disappointing, I'm sure moral will drop. So hopefully that answers questions about tipping. We are essentially like pizza delivery drivers except we carry really heavy stuff and in the case of my city. We drive up to a one hour radius from the warehouse, so we burn up a lot of gas on some trips.. so just use commonsense and do what's fair. I get that some feel it should be absorbed into the cost of Prime or the product. But imagine the price increase if Amazon bought a fleet of delivery vans, gas, insurance,etc . just for perspective. USPS/UPS/fedex drivers all make $15+ dollars an hour. (My brother in law delivers fit UPS and he makes over $40k a year. If Amazon followed the UPS model, that would add significant costs and that prime membership would go way up. Seems like a $5 dollar tip is much better. But I'm sure as Amazon looks at what's working and what's not, things will be adjusted. I certainly wouldn't complain if Amazon provided me with a vehicle, paid gas, maintenance AND paid me $20 an hour.. Be careful what you wish for!"

Amazon has put contractors as "front line" employees to serve customers. That usually ends up being a very bad thing for the brand -- and you can see why in his comments above.

 

Here's a shining example ...

"First time using Prime Now. Great concept, but the service was... lacking. I receive a call from the delivery guy, saying "I'm in front of your building." I give him my door code, and he replies "Are you going to come down?" and complains about having to park his vehicle. Even if I did come down, there is absolutely no way I could possibly carry even a quarter of the items in my order (which is exactly why I wanted to try this service - I live in the city with no car, and I find myself at the grocery store way too often because I can't buy a lot at once and struggle home with it). Finally, he begrudgingly comes up to my apartment, visibly annoyed, and starts to bark orders at me. "Keep everything together!" He then tells me to check the contents of the seven bags, and as I'm ripping open the third one, yells at me to stop. His phone is malfunctioning, so he then has to slowly and painstakingly enter every individual 20ish digit tracking number from each of the bags, complaining audibly the entire time. Obviously the tech issue wasn't his fault, but there was no professionalism in his reaction and it made me feel super awkward. Very uncomfortable and irritating experience that ended up taking about half an hour from the time he called me to the time he left. Fortunately, I had some beer delivered, because I really need one after that mess!"

 

"I don't like the fact that I can only view stuff in the app. This would be good for my mother, but she has difficulty seeing phone screens and doesn't have a smartphone. And what the hell is with this $20 tip?!? LOL WOW!!! I'll just cancel that order. I save lives. I clean up vomit, poop, urine and blood. I comfort. I control pain. I am not allowed to accept gifts or tips and Amazon wants me to tip their courier $20. no."

 

I think it's an awesome idea!

 

I google searched Amazon uber insurance.
Chicago tribune. oct 9th article.

 

After 20 years in the cargo business, let me bottom line this for you: if there were any cheaper way to do this, UPS and FDX would be doing it by now.

Entire herds of MBA's in polo shirts sit around Memphis and Atlanta all day, every day, trying to squeeze more blood out of that turnip. They've been doing it for years. There's no fat left in the system. In fact, most of us in the system think they've cut too much already.

We have contractor-drivers too. They're as cheap as we can get. If we could replace them with college kids in Civics we would have done it by now.

And standing up 20 767's? Seriously? Talk to anybody from the ACMI world.... Where would the sim time come from, for starters....

 

While I certainly agree with Huck, a little creative destruction is good for the economy and industry as a whole. Go Amazon, succeed or fail but make sure you burn through lots of Bezos money in the effort.