Amazon.com Inc. is testing a service that uses the company’s network of gig drivers to fetch packages from mall-based retailers and deliver them to customers.
The program, should it become permanent, could help Amazon expand the variety of goods it has available for fast shipment. Shoppers who want same-day shipping might see products a local mall’s store stocked. They order the item from the retailer on Amazon.com, and one of the Seattle-based company’s contract drivers delivers it.
The service was up and running last year and relies on Amazon Flex drivers. They use their own vehicles to deliver packages. The geographic range of the pilot is unclear. But communications with drivers that Bloomberg reviewed refer to malls with participating retailers in Chandler, Arizona, Las Vegas, Nevada, and Tysons Corner, Virginia.
Amazon spokesperson Lauren Samaha said a “handful” of the company’s existing partner retailers are participating in the program. She declined to name them or reveal how much the service would cost customers or stores. But she noted that retailers have offered their products for delivery on Amazon for years.
“This is just another way we are able to connect Amazon sellers with customers via convenient delivery options,” she said in an emailed statement.
Amazon ranks No. 1 in Digital Commerce 360’s Top 1000.
Intensifying competition
The initiative could escalate the competition between established retailers and startups working to rapidly deliver goods ordered online, often using contract drivers. Instacart Inc. is broadening its offerings beyond groceries. DoorDash Inc. handles some deliveries for retailers like Macy’s Inc. Other Amazon rivals like Walmart Inc. and Target Corp. use gig-economy drivers to deliver some items from their shelves.
Under the new initiative, drivers stop at shopping centers instead of Amazon delivery stations. It’s the latest twist in the Amazon’s complicated relationship with American malls. Malls struggle to remain relevant and must adapt as shoppers stay online.
Amazon already stocks its own urban warehouses with goods from select third-party retailers designated for speedy delivery. The company has also experimented with delivering items stored in partners’ warehouses.
Amazon last year began recruiting mom-and-pop shops, including florists and IT shops, in rural parts of the U.S. to deliver packages, Vox reported this month. The company also recently began offering to fulfill orders offered for sale on select retailers’ own websites, an initiative Amazon calls “Buy With Prime.”
Last-mile trips
Amazon had historically relied on third parties like the U.S. Postal Service and United Parcel Service Inc. for “last mile” trips from its warehouses to shoppers’ homes. The company started building its own delivery capacity with Flex, which launched in 2015. Four years later, Amazon started the Delivery Service Partner program. It relies on contractors to deliver packages in blue Prime-branded vans. Today, Amazon handles most of its own deliveries in the U.S.
Building its own logistics operation helped supercharge Amazon’s growth but came at a cost. The company last month reported its first quarterly loss in seven years as shoppers return to their pre-pandemic habits and acknowledged it now has too many people and an excess of warehouse space. Delivering from other retailers’ stores, if it catches on, could mean Amazon has to build fewer expensive, urban depots.
Amazon threatened workers over union vote, labor officials find
U.S. labor board prosecutors plan to accuse Amazon.com Inc. of threatening staff that if they unionized, it could propose paying them minimum wage. Amazon is also being accused of punishing an employee for seeking a paid Juneteenth holiday.
Unless the company settles, the National Labor Relations Board will issue a complaint, agency spokesperson Kayla Blado said Thursday. An Amazon spokesperson didn’t immediately respond to a request for comment.
The allegations are among many taken to the labor board by the Amazon Labor Union, the upstart group that scored an upset election victory last month at a warehouse in New York’s Staten Island.
Labor board’s findings
The NLRB’s Brooklyn-based regional director has determined that, prior to that election, the company held mandatory “captive audience” meetings at the warehouse. In them, it threatened that if workers chose the union to represent them, Amazon could use minimum wage pay as the starting point for negotiations. The company also said they might take years to get an actual union contract, or never get one. It said while those contract talks were going on, Amazon couldn’t make improvements to their working conditions, according to Blado.
The labor board official also found merit in the union’s claim that when an employee used Amazon’s “Voice of the Associate” board at the warehouse to advocate for a paid Juneteenth holiday, the company retaliated by barring that worker from posting there again.
Amazon has previously denied wrongdoing. It said its “information sessions” are meant to ensure employees understand the facts about unions and elections. The company has formally challenged ALU’s election victory. It alleges the union broke election rules and that the NLRB violated its duty to be impartial, including by suing Amazon to try to get a fired activist reinstated. The agency’s general counsel, Jennifer Abruzzo, dismissed that allegation in an interview last week.
“But for Amazon’s unlawful labor practice, we would not have had to go into district court to seek an injunction,” said Abruzzo, a Biden appointee.
ALU’s attorney Seth Goldstein said he hopes the labor board will use the warehouse allegations to overrule existing precedents that allowed companies to hold mandatory anti-union meetings and to mislead employees about their rights.
By trying to get the election overturned rather than commencing contract talks, Amazon is “making good on the threat,” Goldstein said in an interview.
Complaints issued by labor board prosecutors are considered by agency judges, whose rulings can be appealed to NLRB members in Washington D.C. and from there to federal court.
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