Amazon Flex To Hire Drivers For Prime Now Package Deliveries
In the latest attempt by retail giant Amazon to enter the increasingly-crowded field of the so-called “on-demand” economy, this week the company announced Amazon Flex, an “Uber-like” service where drivers will be paid between $18 and $25 per hour to deliver Amazon’s one-hour Prime Now packages with their own vehicles. The AP reported that Amazon is testing the service in Seattle right now, but it’s expected to come to parts of New York City, Baltimore, Miami, Dallas, Austin, Chicago, Indianapolis, Atlanta, and Portland in the near future. Under the program, drivers will have to be at least 21 and “pass a criminal background check and motor vehicle records review.” PC Magazine noted that Amazon will hire drivers using an Android smartphone app. Drivers will be hired for two, four, or eight hour time blocks on a particular day, or will be able to “schedule up to 12 hours per day for the future.” They will be given pick-up and drop-off locations within a local area based upon how many hours they’ve signed up for on a particular day. CNBC noted that analysts at Piper Jaffray last week suggested, “Same-day and same-hour delivery have the potential to open an entirely new retail segment to Amazon, the instant gratification market.” Fortune noted that Flex lets Amazon “control the shipping and delivery experience” instead having to rely on third-party couriers and shipping companies to make deliveries as it has done “with most Prime packages.” However, the drawback to Flex “is the ongoing backlash against the so-called ‘gig-economy,’ which doesn’t necessarily include full-time benefits for contract workers.”
What This Means For Small Businesses
On-demand services can provide novel ways for small businesses to reach customers, and the “gig economy” allows startups to set worker schedules in novel ways that benefit both the business and the worker. However, the entrance of a well-established retail giant into the on-demand sector may create extra competition for the small business community.
Additional Reading
Bloomberg News, Mashable, TechCrunch, Engadget, Wired, and the Washington Post also covered the new Amazon Flex program.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.
