I have direct experience interacting with the Amazon delivery partner fleet operations. I don't disagree, I would like to add a few details to the discussion.
There's one important nuance missing in all this and that is that the Fleet contractors, those who own and operate the ProMaster and MB step-vans, they are "independent operators" who are sole suppliers, totally beholden to Amazon. I suspect it is extremely limited to what extent they can leverage any power against amazon, aside from of course striking the means of production, likely forfeiting their work.
The arrangement makes these events, to my mind, look like a much bigger sacrifice than it would in a normal market. I mean, just like you said, they up and closed shop rather than keep milking this cow! Maybe it's a bit sour.
From what I can gather, the fleets are assigned routes and duties, and are prohibited from using their capital (The blue Amazon fleet vans) for other business prospects, obviously. This makes sense because it says AMAZON on the Van, and the Drivers wear Amazon uniforms. But these are ostensibly independent small businesses.
Amazon, I believe, does front the capital expenditure for the vehicle acquisition, and they also require the maintenance to be accomplished on schedule or they levy a fine. The Operators take all the busines and insurance and training and health risks, and I'll bet there is no stipend for "PTSD from 5 more unreportable near miss accidents today." I worry that there is nobody with this kind of fleet logistics experience overseeing these operations.
When Amazon decides to re-organize routes, the truck operators may find they are operating at a now reduced revenue stream, with no alternative but to acquiesce. Their fixed expenditures don't change too much, and while they still need to maintain the fleet and make choices about that, their payroll, etc with the added uncertainty of whether or not Amazon is gonna throw them a bone, I have witness that they are cutting corners.
They can't liquidate the vehicles, because they are now drastically devalued from normal depreciation, Amazon branded (probably bonded somehow) and these things are pretty banged up. Also, I digress--the ProMasters kind of suck, but they do seem to keep cranking for now.
It may be that perhaps those operators who cannot adjust to the required efficiency in operations should go under, forfeiting their start-up capital, but Amazon deigns the start-up worthy or not, and bequeaths the start up cash to these guys and gals. Amazon can leverage their incredible reputation, stock value, and cold-hard liquid cash to get the best deal on credit in a market where the interest rate is Zero. I don't know what the operators pay--but becha it ain't zero.
I feel uncommonly conflicted about this arrangement.
To me it looks like Amazon is running these businesses without the risk or accountability that comes from that. It’s just another shell game to evade regulation akin to Microsoft’s permanent contractors or gig economy workers
> I remember when this program came out and it was an exceedingly bad deal on the surface. I was surprised to see anyone buy into it.
I have no actual firsthand knowledge about this program, but I wonder if part of it was an appeal to (for lack of a better term) some people's ignorant individualist optimism (e.g. the idea that other people will fail because they're slackers, but they can succeed because they're smarter, can work harder, etc.).
I was thinking about this more.
If Amazon would shift from "Own your own business by running our delivery service for us!" to "Contract with amazon and provide fleet management services to our dynamic orthogonal growth paradigm with geometric returns!" this could be much more fairly and safely organized.
Amazon could do whatever corporation thing they have to do to spin up a new business unit (to avoid this is probably why they are doing it in this honestly scam-ey way...but hey) and take on the payroll, benefits, training, compliance and overall insurance risk. Then, they can organize these "Logistics Companies" into something that looks more like a property management firm.
1) They need to create a national fleet account to charge and manage the vehicles services
2) They need to run the payroll and sign the check for their driver employees and warehouse logistics people
3) Create a property management agreement and designate a sort of foreman for the warehouse distribution operations. The existing Amazon delivery partners are well positioned to do this.
4) Make clear the relationship and own the vehicles. If they do not want to own the vehicles, they can make the "Logistics Companies" be like an Enterprise or Hertz self-branded fleet company.
5) Engage in a dispatch and planning program, and surely delegate this role from Amazon to the local logistics outfit.
This will afford a lot of flexibility and take the burden off of Amazon of managing the dynamic local environments that they clearly don't want to touch.
The fact that they don't do this leads me to believe that they really just want a bag man to take the blame when some old lady take an Amazon smile to the side of her walker and splatters on the pavement.
Sorry for the grim ending. I really, really worry that the captain of the ship is some kind of overheating GPU in us-west.amazon.com or something worse, like an Iridium-connected Alexa skill in the ceiling fan of the ship head on "The Flying Fox".
> they are "independent operators" who are sole suppliers, totally beholden to Amazon.
I guess this is one way to get around regulation of Uber-style independent contractor regulations. I have no idea why someone would start a company this small doing a commodity service with Amazon as your only customer, especially considering Amazon's reputation.
There's one important nuance missing in all this and that is that the Fleet contractors, those who own and operate the ProMaster and MB step-vans, they are "independent operators" who are sole suppliers, totally beholden to Amazon. I suspect it is extremely limited to what extent they can leverage any power against amazon, aside from of course striking the means of production, likely forfeiting their work.
The arrangement makes these events, to my mind, look like a much bigger sacrifice than it would in a normal market. I mean, just like you said, they up and closed shop rather than keep milking this cow! Maybe it's a bit sour.
From what I can gather, the fleets are assigned routes and duties, and are prohibited from using their capital (The blue Amazon fleet vans) for other business prospects, obviously. This makes sense because it says AMAZON on the Van, and the Drivers wear Amazon uniforms. But these are ostensibly independent small businesses.
Amazon, I believe, does front the capital expenditure for the vehicle acquisition, and they also require the maintenance to be accomplished on schedule or they levy a fine. The Operators take all the busines and insurance and training and health risks, and I'll bet there is no stipend for "PTSD from 5 more unreportable near miss accidents today." I worry that there is nobody with this kind of fleet logistics experience overseeing these operations.
When Amazon decides to re-organize routes, the truck operators may find they are operating at a now reduced revenue stream, with no alternative but to acquiesce. Their fixed expenditures don't change too much, and while they still need to maintain the fleet and make choices about that, their payroll, etc with the added uncertainty of whether or not Amazon is gonna throw them a bone, I have witness that they are cutting corners.
They can't liquidate the vehicles, because they are now drastically devalued from normal depreciation, Amazon branded (probably bonded somehow) and these things are pretty banged up. Also, I digress--the ProMasters kind of suck, but they do seem to keep cranking for now.
It may be that perhaps those operators who cannot adjust to the required efficiency in operations should go under, forfeiting their start-up capital, but Amazon deigns the start-up worthy or not, and bequeaths the start up cash to these guys and gals. Amazon can leverage their incredible reputation, stock value, and cold-hard liquid cash to get the best deal on credit in a market where the interest rate is Zero. I don't know what the operators pay--but becha it ain't zero.
I feel uncommonly conflicted about this arrangement.