Amazon is trotting out new benefits and higher pay for some of its drivers, the company announced in a Tuesday afternoon press release. Specifically, it is putting more funding towards its “Delivery Service Partners”, which are independent businesses that manage a fleet of vehicles and drivers under the Amazon banner in a franchise model.
The DSP program has generated more than $US26 ($36) billion in revenue for Amazon over the past four years, the company wrote. “Investing in our DSPs means that we are continuing to invest in communities nationwide,” said Parisa Sadrzadeh, a company executive, in the statement.
In total, the company said it is putting an additional $US450 ($625) million towards the DSP program. Newly funded benefits are set to include an educational stipend for drivers in “participating DSPs” of up to $US5,250 ($7,288). There’s also now a 401(k) plan option for U.S.-based DSP workers, which includes some Amazon support for employer matching contributions in the first year. The company also told Gizmodo it’s dedicating about $US325 ($451) million towards direct pay rate increases for drivers, in an email.
However, the company didn’t specify whom the rate increases apply to or how that money will be distributed. There are more than 3,500 DSPs globally in about 15 counties, employing 275,000 drivers, according to Amazon. So, it’s likely safe to assume that any top-down rate increases won’t be identical from franchise to franchise. An Amazon spokesperson told Gizmodo the “rates are determined by the DSPs.”
The benefit boost leaves out Amazon Flex drivers, the workers whom the company contracts to use their own personal vehicles, mostly to fill in the gaps of last mile deliveries. In March, Flex divers protested for higher pay in Los Angeles, amid record fuel prices. In response to questions about pay increases for Flex workers, the company spokesperson told Gizmodo only that, “the announcement from yesterday is not tied to the Amazon Flex delivery partners.”
Unlike Uber, Lyft, DoorDash, and Walmart which all also rely on contractors’ willingness to drive and maintain their own cars, Amazon didn’t implement fuel surcharges or higher driver pay to offset the burden of expensive gas, according to a report from CNBC.
Previously, Amazon also had to pay nearly $US60 ($83) million in settlement money in 2021 to Flex drivers, after the Federal Trade Commission sued the company over withholding worker tips.
Update 9/14/2022, 1:15 p.m. ET: This story has been updated with additional information from Amazon.