Amazon increases the pay for contracted delivery drivers to $22/hour in response to union pressure and a $2.1 billion DSP investment.
TakeAway Points:
- Amazon is investing $2.1 billion in its Delivery Service Provider (DSP) program, increasing the average compensation for contracted delivery workers to $22/hour.
- The investment represents a 7% increase over the previous year and covers safety programs, training, and increased pay.
- The pay increase coincides with the NLRB investigation into Amazon’s “joint employer” status with contract delivery workers and unionisation activities.
Delivery drivers’ wage increase
Amazon announced on Thursday that it is raising the average national pay for its contracted delivery drivers to approximately $22 an hour, up from $20.50 an hour. This wage increase is part of Amazon’s $2.1 billion investment this year into its Delivery Service Partner (DSP) program. The DSP program consists of contracted firms responsible for the last-mile delivery of packages from Amazon warehouses to customers’ doorsteps.
Beryl Tomay, Amazon’s vice president of transportation, stated in a blog post that many DSPs are “already paying well above” $22 an hour. The increased rates will support DSPs “in their efforts to recruit and retain high-performing teams.” The announcement coincides with Amazon’s annual, closed-door conference for delivery contractors, called Ignite Live, held in Las Vegas. Amazon has added more than 3,500 DSPs to the program since its inception in 2018.
Investing in delivery programs
The report states that Amazon’s $2.1 billion investment will be allocated towards safety programs, training, and additional pay for contracting firms. The company expects these outlays to raise the average pay for drivers, who operate Amazon-branded vans but are technically employed by independent companies known as Delivery Service Partners. This represents a 7% increase from the previous year.
“Contractors and their teams go to great lengths to take care of Amazon customers, and that’s why we want to support DSPs with our biggest investment yet,” said Beryl Tomay in the blog post.
The additional $2.1 billion will be spent in the US and Canada in 2025. Amazon tends to announce increased outlays for the program annually, reflecting its ongoing commitment to enhancing the DSP program.
Legal scrutiny and unionisation efforts
The wage increase comes amid renewed unionization efforts among Amazon’s contracted delivery workers. The Teamsters union has led several strikes at Amazon delivery facilities over the past year and has made organizing Amazon employees a key focus. The National Labor Relations Board (NLRB) has also been scrutinizing Amazon’s relationship with its contracted delivery workforce. Since August, the federal labor agency has issued two determinations finding that Amazon should be deemed a “joint employer” of employees at two subcontracted delivery companies.
According to the report, the NLRB’s determination could compel Amazon to bargain with employees seeking to unionize. Amazon has fought to avoid being designated as a joint employer, arguing that the workers are employed by third-party firms. Lawmakers and labor groups have disputed this characterization, noting that drivers wear Amazon-branded uniforms, drive Amazon-branded vans, and have their schedules and performance expectations set by Amazon. The company has previously stated that it disagrees with the NLRB’s findings.
