Amazon DSP drivers reveal the challenges of one-day shipping
What's going on? It's your girl Shaleen the Queen coming to you guys with a video of the day in the life of an Amazon delivery driver. I have 113 stops today. So I'm going to start with this one. Then I go up, then down, up, down, up, down, up, down. Delivering packages for the world's largest e-commerce company is a monumental job, especially with this month's annual Prime Day sales event.
I've been tired, exhausted long days. Shaleen Williams, and 115,000 other drivers are part of Amazon's solution to the most expensive part of a package's journey, getting it that last mile to customer doorsteps. This is where I used to load out. 210 right there. We spoke with current drivers and took a ride with former driver Adrienne Williams to see where she delivered for Amazon from November 2019 to July 2020.
I would average between like 150, 180, somwtimes 190 packages. Since 2018, Amazon has been building out its network of these independent contractors - Delivery Service Partners or DSPs. With more than 2,000 of them across the U.S. now DSPs helped Amazon reach notoriety for extremely fast shipping. There's a lot of aspects of the job that are really enjoyable. You get a lot of exercise. The customers are really happy to see you.They're getting whatever the heck they ordered. But there's things that need to be fixed. From urinating in bottles to running stop signs, routes that lead drivers to run across traffic, dog bites and cameras recording inside vans at all times, DSP drivers have voiced big concerns, largely tied to the relentless workload required to meet Amazon's one-day shipping promise.
The expectation is just go go go go go at your own cost. Historically, Amazon relied heavily on UPS, the Postal Service and to a lesser degree FedEx for the heavy lift of last-mile delivery It was 2013 they had a holiday season was a fiasco in terms of late and missed deliveries. A lot of it had to do with weather. A lot of it had to do with Amazon dumping massive amounts of volume at the last minute on UPS and to a lesser extent FedEx. But it was at that point that Jeff Bezos said we can't entrust this business entirely to other people. So Amazon built an in-house network called Amazon Logistics. It's grown to include everything from semi-trucks to Amazon Air planes, individual Flex drivers, and since 2018, fleets of vans run by Delivery Service Partners or DSPs.
Amazon pretty much has control over the operation. It's Amazon's vans, it's Amazon's insurance, they're providing it at a discount. Amazon wants entrepreneurs, they need drivers they want to control as much of the delivery processes as they can. These small contractors allow Amazon to oversee deliveries in regions all over the country without directly hiring any employees. Amazon fights tooth and nail to maintain the status quo that these are contractors. They're not employees because if they are employees, then you've got to pay them benefits. You've got to pick up their expenses for uniforms, trucks, what have you. And then Amazon's cost structure changes.
And if Amazon's cost structure changes, so will yours,. They have a built up their operation very, very quickly, largely because they were able to do build a last-mile network using third-party DSPs instead of having to go out and hire all these people and put them on the books themselves. Amazon Logistics also allowed Amazon to avoid paying outside carriers for the majority of shipping. Amazon now delivers nearly two-thirds of its own packages through its logistics programs like DSP. We estimate that Amazon roughly spends in a $3.50 to $4 a box to deliver. This compares to UPS and FedEx's average revenue per unit at about $10 to $12. So we think it can be a meaningful savings to Amazon to do this themselves.
Control over its own deliveries allowed Amazon to make one-day shipping the norm in 2019. Although the pandemic caused significant shipping delays, the number of Prime members recently reached 200 million. Since the early days of Amazon Logistics bigger independent logistics companies have also been under contract to deliver for Amazon. But in 2018, Amazon went after a wider regional reach by launching the DSP program with special deals for small businesses with fleets of 20 to 40 vans and 25 to 100 employees. To get the program off the ground. Amazon purchased 20,000 dark blue Mercedes Sprinter vans to start, leasing them to DSPs at a discount. It offered $10,000 grants to existing Amazon employees, Black, Latinx and Native American entrepreneurs and military veterans trying to launch a DSP. The DSP model is separate from Amazon Flex and even smaller business model in
which independent gig workers make between $18 and $25 an hour driving individual routes on demand. Unlike Flex drivers, DSPs have Amazon provided discounts on things like fuel, insurance, uniforms and electronic package scanners, known as Rabbits. The DSP is responsible for almost everything else, from maintaining the vehicles to hiring drivers and providing pay, benefits and overtime.
It's cheaper, it gives them more flexibility, they don't have work rules to abide by. If you as a contractor want to provide benefits to your drivers, go ahead. Amazon will not do that. Amazon offers terrific deals to people. One of the reasons they're able to do that is they don't have the cost structure that a UPS has.
From washing vans to replacing vans to paying for workers that get hurt, they can put it on a DSP owner, and they don't have to pay for it. While UPS, FedEx and the Postal Service directly employ drivers, Amazon's contractor model isn't unique. While Amazon has about 2,000 DSPs, FedEx Ground has around 7,500 of what it calls Independent Service Providers. What Amazon's doing is a little bit different, in that they're using DSPs that are also kind of professional delivery companies but maybe a little more mom and pop and a little smaller in nature. The DSP is responsible for recruiting and hiring drivers.
Fast pace, you're not really dealing with anybody. You're doing it by yourself with the occasional manager or boss calling you, telling you something that you have to do. I mean, I guess I'll say Amazon's the best job I've ever had, so far. Drivers pick up their vehicles at a designated lot or Amazon warehouse, then line up and drive in to load up with boxes organized into color-coded bags. All my bags are over here. And then I have my oversize over here mainly on the shelves, and I got some on the floor. Each package is labeled with yellow stickers that assign them a chronological order for drop-off.
I normally always sort my first bag while I'm just waiting. And that helps me, like, when I get to my first couple of stops, everything's already sorted. So I don't have to go through and re-sort everything and take more time when I'm actually on the clock. Some DSPs also have the bigger walk-in style delivery trucks like those used by UPS. Jackie Nash drives one of those for a DSP in Richmond,
California. She wasn't comfortable appearing on camera. It's so much bigger, it's more room, you can spread your packages out. In the van, you have to stack th packages. It's way harder. DSPs also lease unmarked white vans for their drivers, although these don't have shelves.
Anytime you stop, any time you turn, all your packages will just fall all over the place on the ground, and then you're done. And then you're just rummaging through things. And then that also lends the problem of slowing you down. Amazon sets the routes and delivery loads of up to 400 packages per driver per day using the Flex app.
I have left 111 packages. So if I click on this map, you can kind of see my route for today. Amazon estimates it costs as little as $10,000 to start a DSP. Amazon pays the DSP per route and says annual profits can range from $75,000 to $300,000. But the DSP business can be a tough one. Amazon is not about making money for anyone but Amazon. It's very hard for a contractor to generate a lot of profit based on what Amazon is charging
per parcel. And also the workload is very, very intense, you know, 10, 12, 14 hours a day. A lot of stops. A lot of deliveries. CNBC reached out to several DSP owners, although none would talk on the record. Despite requests Amazon also did not provide interviews with DSP owners or drivers. During the pandemic, Amazon sales have smashed earnings expectations, and it's hired more than 400,000 people. But DSPs didn't always share in the success. Some turned to federal aid to make it through, receiving at least a million dollars from the Paycheck Protection Program. But the pandemic was certainly a popular time for drivers to join the program, like Shaleen Williams who started driving in April last year. So I just debrief from my route today and Amazon has some snacks out for us.
One October 2020 survey of 1,500 delivery drivers found that 63% joined in the last six months. According to Indeed.com. Amazon driver pay averages around $18 an hour, about $1.50 above the national average. Shaleen Williams makes $15 an hour. Adrienne Williams made $20 an hour. Jackie Nash makes $20.25 an hour. Nash is trying to get a job at UPS. They pay way more. They top out at $38. They get raises every six months. They do not slave you with all these packages and they're union. Who does
not want to work for a union? And their benefits are excellent. UPS drivers belong to the Teamsters. Meanwhile, union presence at FedEx is minimal. Because DSPs are contractors, it's hard for them and their drivers to unionize. You will never have Amazon approach the same model as UPS does because Amazon would have to price prime at like $250 per person. Not being subject to union work rules, union wages, gives them a lot of flexibility to pivot on a dime and they do.
The arm's length relationship also gives Amazon the power to sever the contract with a DSP or a driver at any time. This provides Amazon some insulation from the inevitable risks of the shipping industry like botched deliveries, accidents and even deaths. In 2016, an Amazon driver struck and killed an 84-year-old grandmother in Chicago. Her family brought a lawsuit against Amazon and the contractor alleging that Amazon put excessive pressure on drivers to deliver on time. Two more deaths occurred in 2018. The little corners that you cut are very dangerous for both you and the community around you. People are busting their ass driving way over the
speed limit. People are running through stop signs, running through yellow lights. Everybody I knew was buckling their seatbelt behind their backs because the time it took just to buckle your seatbelt, unbuckle your seatbelt every time was enough time to get you behind schedule. A 2019 ProPublica report found Amazon's contract drivers were involved in more than 60 serious crashes since 2015, at least 10 of which were fatal. In court Amazon has repeatedly said it's not responsible for the actions of its contractors. Delivery is also an inherently dangerous business for drivers from any company. Of the 5,333 occupational deaths in the US.. in 2019, more than 1,000 of them were drivers. According to one report by a
labor union coalition that analyzed data from the Occupational Safety and Health Administration, Amazon DSP workers experienced severe lost time injuries at nearly three times the UPS rate in 2020. Amazon holds mandatory safety meetings for all warehouse employees before each shift. But outsourcing driving to DSPs takes away Amazon's ability to control these kinds of day-to-day operations. Instead, it relies on technology. Amazon tracks safety metrics with its Mentor app, which scores drivers on behavior like speed, braking and use of mobile devices. It uses collective driver
scores to rank a DSP from poor to fantastic plus, offering bonuses for high scoring DSPs. It was more of an emotional drain, like a mental drain because you were always afraid of like, what was my Mentor score gonna say for the next day? Did I get caught doing something wrong? Did something get scanned incorrectly? If you can see right here, mine is at four-something and they say my driving on Thursday was risky. AI-enabled cameras in some vans have four lenses to watch the road, both sides of the vehicle and the driver. An Amazon instructional video says
it's recording 100% of the time. I just don't feel like I should be watched eight to ten hours out of the day. They say it's for safety, which I can kinda see. Like if we were to get into an accident, they want to see what we were doing inside the van. But it just seems like it's more so to kind of make sure we weren't in the wrong. They could try to pin it on us.
The camera's AI software can activate audio alerts if it detects one of 16 different safety issues, such as failing to stop at a stop sign, wear a seatbelt, or pay attention to the road. Distracted driving. If I make a hard turn or something or try to grab a phone or something, like you can hear them say, "distraction." Some drivers told us the cameras do provide a sense of safety under certain circumstances like around aggressive dogs or customers. The camera that's facing out that can see the road, I feel that's a good part of the camera because if you pull up to a customer's house you know if there is an altercation. If the altercation is on the camera feed, you know they can go back, review the camera and then take action that way. Shaleen Williams has been bitten by dogs on her routes. Once she had to go to urgent care but waited until after she delivered all her Amazon
packages. The first leg it bit, it didn't break skin or anything. But the second time the dog bit me it definitely broke skin. I made sure to tell the homeowner and everything and then I had to go to Urgent Care after my shift. I wasn't gonna cause one of my colleagues to have to come save me. So yeah, I finished my route and then went after. In a statement Amazon told CNBC, "Safety is our top priority, which is why we've been investing in driver safety for years including industry leading camera-based technology in our vehicles that reduces accidents by 48%. We also use sophisticated technology that plans drivers' routes. And in fact, more than 90% of drivers finish their routes before their scheduled time."
So they've been driving out at a steady pace like this since 6am. Yeah, that's a lot of deliveries. With Prime Day this month, Amazon is likely to see record-breaking sales. And this means lots of deliveries and pressure on the DSPs and their drivers. When new people would come and they'd be like, Oh, I'm doing so good, we'd be like, slow down. Because if you deliver 120 packages today, you're gonna get 124 tomorrow, and it never ends.
We can work 10-hour shifts. My heaviest day was I had 199 stops, about 320 packages. Sometimes I will have to take all the oversized packages out just to find the one that I need. Drivers follow routes on the Flex app, which are determined by Amazon's algorithms, which also set package loads and delivery order. Some drivers say the routes have made them walk across busy highways carrying armloads of packages, and that the GPS has issues.
The route had me backtracking today a lot in the beginning. So I kind of got behind schedule. But ain't nothing I'm still gonna finish before my 10 hour shift is over. I've had days where the GPS was horrible the whole time because their GPS doesn't work in places like Vacaville. Locked there. Locked. Can't get in, can't get in, gate, gate, turn left to enter a private road. I've had days where the stops were so close together,
and it was triple digits outside and so my AC could never heat up and I got heatstroke and how to get taken off my route by the ambulance. Some of that stuff can really be mitigated by just having a route designer that says if we're going to put these people in the worst crime filled neighborhoods, maybe we should let them be there in the daytime instead of 10pm in November because it's Christmas time and that's when Amazon workers are more apt to get carjacked. Thank you so much for giving me this in the daytime because I would've literally thought I was getting killed tonight. In other instances, drivers have reported they don't have time to find a bathroom.
There were times where I didn't drink anything all day and eat anything all day because that might cause you to go to the bathroom. When you have to leave your route to go use the bathroom, by the time you're back at your route, that's like a whole 30 to 45 minutes that you're taking away because you're driving 14 minutes or eight minutes to go try to find a bathroom and then that stops your whole flow of delivering your packages. Now that's why some people are urinating in cups and plastic bottles. The only thing with that though, is they don't necessarily throw them out of the vans or throw them in the trash or pour them out. They just kind of leave them which is definitely disgusting, you know getting into the vans
the next day, and seeing somebody's pee bottle sitting behind the seat or sitting in the cupholders. Some of my co-workers have also found people had urinated in hand sanitizer bottles. So you can only imagine what it would feel like if you went to use the hand sanitizer and found out that it was pee. That was a talk at our stand-up meetings almost every single day. Like empty your vans at the end of your shift. Nobody wants to empty your pee bottles. The conversation was never don't pee in bottles. That was never the conversation. The conversation was, throw them away. CNBC went to one gas station near an Amazon warehouse in the Bay Area where the manager says drivers throw pee bottles away after their shifts. She
didn't want to give her last name or appear on camera in the interest of protecting her job. My gas station attendants were complaining about the urine bottles in the trash constantly. It was a lot of dripping, it smelled really bad in the dumpster area. It was leaking all over the freakin parking lot and everything because it was always liquid in the garbage cans. Should Amazon be doing something differently? Yes, maybe they can provide porta potties around the cities for them because I think AC Transit does that also in areas they know there's trouble using the restroom. Amazon initially denied that workers urinate in bottles, but later apologized. It admitted that drivers do have trouble finding bathrooms but
said it's an industry wide issue and is not specific to Amazon. With Amazon, you have a different route every day. One day you might be in a place where a bathroom is plentiful and the next day you may be in the middle of nowhere. And that's where I think it's different from like FedEx and UPS because at least those people can plan their day. There's no way to have any control over your day with Amazon. Holding my pee for like two hours because I'm in the boondocks and there's nowhere to go.
Amazon reserves the right to deactivate drivers for things like public urination and abandoning customers' packages in outside unsecured locations. Williams decided to quit after a particularly bad day last July. I had like the day from hell and I just lost it. I had gotten like, charged by somebody's Pitbull. And then I got locked in somebody's gated community. It was only for like five minutes, but when you're on this strict time crunch. And that's when one of my co-workers was like, "Hey, did you hear the three drivers got sick and they told our boss not to tell anybody?" And I was just like, I quit.
A new feature of the Flex app pings drivers when they're supposed to take breaks and reroutes them back to the warehouse if a driver has been logged on for too many hours. I wouldn't say it's kind of any riskier or any worse or any more of a challenge than honestly, any other form of delivery. Amazon is also working to make its vehicles safer. It ordered 100,000 electric delivery vans from Rivian Automotive that are all scheduled to be on the roads by 2030. Features include exterior cameras that give the driver a 360 degree view, strengthened driver's side door, larger floor
space for moving around packages in the back of the van, and wraparound taillights for better brake detection. I think Amazon owes it to the contractors and the drivers to make sure that the driver is operating safely. And that includes not forcing the driver to make 25 stops in a specific timeframe that compels the driver to take risks behind the wheel.
Adrienne Williams suggests that an Amazon employee be physically present in each region who is in charge of listening to driver feedback and improving routes. There's a destination on my left across this water. Maybe it's too big of an ask to say put a route designer in every warehouse, but break that down regionally because you're really putting drivers in dangerous situations by having route designers only in Seattle who don't understand the areas they're putting drivers in. And they're putting drivers in really, really dangerous situations. Drivers need people to talk to, to go back and say like, "Hey, this didn't work. You drove me into a lake. It'd be nice to not drive into this lake next time." An Amazon spokesperson told CNBC it's working on addressing gaps in its routing system and improving capacity planning, hoping to give drivers fewer stops. They have to ease up on the time. Stuff happens on the road and it's not always the driver's fault. But the idea that a driver feels like he can't
eat lunch or go to the bathroom, he or she, is a problem. People are hitting folks in crosswalks. They are hurting their own bodies because they're so afraid of losing their jobs because they have to get these routes done. So either hire more drivers or just say maybe things won't get delivered in two days.