Amazon will use small businesses to help deliver packages in the US
Your local bodega could bring shipments to your door.
A local shop might deliver your next Amazon order. The company tells Axios it's launching an Amazon Hub Delivery system that uses small businesses in 23 states (including California, New York and Washington) to complete shipments to customers. Those businesses need secure storage areas and must deliver an average of 30 packages every day outside of major holidays. However, Amazon isn't fussy about business types for this program — bodegas, coffee shops, florists and other locations can all qualify.
Hub Delivery is ultimately an expansion of previous initiatives. Amazon debuted an "I Have Space" system in India in 2015, and expanded it to both Japan and Spain. An American pilot program began in late 2020, although it focused on improving delivery for rural customers. The new approach covers over 20 major cities, including Boston, New York City and Los Angeles.
The incentives are clear. Amazon gets more reliable deliveries by offloading "last mile" shipments to small businesses rather than relying solely on dedicated couriers. Partners in turn can grow their businesses and supplement their income, Amazon VP Beryl Tomay says. Axios estimates that, at $27,000 in earnings per year, Amazon is paying about $2.50 per package. The online retailer hopes to team with 2,500 small business drivers by the end of 2023.
The strategy comes months after Amazon announced mass layoffs as the pandemic recovery and a rocky economy ate into profits. It also comes amid labor complaints that include past allegations of misusing Flex drivers' tips. Hub Delivery theoretically helps Amazon not only trim costs, but minimize the labor disputes that might come with using its own workers for shipping. Not that the tech giant is completely averse to using its own staff. It's still committed to buying about 100,000 Rivian delivery vans that will bring packages to customers.
