Amazon, which is racing to deliver packages faster, is turning to its employees with a proposition: Quit your job and we'll help you start a business delivering Amazon packages.
The offer, announced Monday, comes as Amazon seeks to speed up its shipping time from two days to one for its Prime members. The company sees the new incentive as a way to get more packages delivered to shoppers' doorsteps faster.
Amazon said it will cover up to $10,000 in startup costs for employees who are accepted into the program and leave their jobs. The company said it will also pay them three months' worth of their salary. The offer is open to most part-time and full-time Amazon employees, including warehouse workers who pack and ship orders. Whole Foods employees are not eligible to receive the new incentives.
Seattle-based Amazon.com Inc. declined to say how many employees it expects to take them up on the offer.
The new employee incentive is part of a program Amazon started a year ago that lets anyone apply to launch an independent Amazon delivery business. It is part of the company's plan to control more of its deliveries on its own, rather than rely on UPS, the post office and other carriers. Startup costs start at $10,000 and contractors that participate are able to lease blue vans with the Amazon smile logo stamped on the side. A delivery fleet owner with 20 to 40 of the vans can potentially earn $300,000 a year, Amazon says.
CBS MoneyWatch contributor Kathy Kristofthat would-be delivery moguls "may want to think twice before you accept it."
Kristof, who founded the SideHusl.com website for freelance economy workers, wrote in CBS MoneyWatch in June 2018 that "the kind of money Amazon is talking about requires an extraordinary amount of work. You've got to find 20 to 40 fit and responsible individuals with good driving records to operate your vans, do background checks and process employment paperwork and then manage the mind-boggling job of scheduling not only their time, but the delivery of thousands of packages per month within tight allotted time frames."
"It is a 24/7 management commitment," Peter Schlactus, co-founder of the Association for Delivery Drivers, told Kristof. "It would be interesting to see what your pay would work out to on an hourly basis."
Still, Schlactus also said there's never been a better time to be a delivery driver or operate a delivery business. Because more sales are happening online and more companies are trying to compete on service as well as sales, delivery drivers are in high demand. "There is a shortage of commercial drivers, which means they can command better terms and better conditions than any time in recent memory," he said.
Overall, more than 200 Amazon delivery businesses have been created since it launched the program last June, said John Felton, Amazon's vice president of global delivery services.
One of them is run Milton Collier, a freight broker who started his business in Atlanta about eight months ago. Since then, it has grown to 120 employees with a fleet of 50 vans that can handle up to 200 delivery stops in a day. It has already been preparing for the one-day shipping switch by hiring more people.
"We're ready," Collier said.