Amazon.com, Inc. (NASDAQ:AMZN)’s services of ultra-fast delivery has landed it in court. Drivers, especially in Teaxs claimed that they are being exploited, and they should be treated like regular workers.
Amazon adopted the use of independent contractor with the primary aim of meeting their promise for Amazon Prime orders (within two hours). They hired on-demand drivers through Amazon Flex program in September. As long as a driver had a car and a smartphone, they could make $18 to $25 an hour. This was according to an advert circulated during recruitment. The drivers would get to register for shifts by use of an app.
This method of delivery makes much sense to Amazon since it helps the company to reduce labor cost while also contesting with Uber International C.V., Alphabet Inc (NASDAQ:GOOGL) and Wal-Mart Stores, Inc. (NYSE:WMT) for the growing market of customers who want orders made to be delivered instantly. This form of delivery also faces risk especially lawsuits from a driver who claim to be mistreated and also regulators seeking to hold up workers’ rights.
This gamble in some way could pay off since there is a legal gray area over how to classify and compensate employees. It will take years to clear, this meaning, any penalties will probably be written off as the cost of doing business. This is what labors’ lawyers said. Some may require their employees to take an online driving course as an insurance policy.
Amazon’s same day delivery currently covers 24 metropolitan areas in an area with 75.7 million population. Profits from this service might be second to the long-term goal of signing customer for $99 a year Prime membership. Those who usually subscribe spend about twice.
Policymakers have been pressing to adapt 20th-century labor law. Currently, contractors pay their own expenses and are not protected by minimum wage and overtime laws. Lawyers have stated that this might be redefined during the next century and by this time Amazon and other organization might be using drones to deliver their goods.
Beth Ross, who is the contracted driver lawyer, reckoned that several hundred Amazon drivers are making about $11 an hour and after expenses they are left with less than $7.25 which is less than the minimum wage. She stated that since Amazon hired them through Flex program, they should be classified as employees and reimbursed for expenses, mileage, missed meal breaks and overtime.