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Amazon to Help People Start Delivery Services for Its Packages

28 Jun 2018

Amazon has more than 100 warehouses. It has a fleet of trucks, and even its own airplanes. Now, in another effort to help get its millions of packages to shoppers faster, it wants to build an army of delivery people, too.

The company announced Thursday a new program aimed at helping people start their own businesses delivering packages for Amazon.

For a minimum investment of $10,000, people in the United States will be able to open and manage their own delivery service handling Amazon packages. Although the couriers will not be employees of the company, they’ll get access to Amazon-branded vehicles, uniforms and more.

By the company’s calculations, an owner could earn as much as $300,000 a year in profit by operating a fleet of up to 40 vehicles.

The program is a potential solution to a growing problem Amazon faces as it handles an ever-increasing number of packages for customers all across the country: How to quickly get packages from its various package-sorting centers to people’s doorsteps.

But the start-up service is certain to raise questions about whether it could challenge — or even replace — some of the work currently done by Amazon’s partners, including United Parcel Service and the United States Postal Service.

One of the test participants in Amazon’s new delivery program, Olaoluwa Abimbola, left, with Dave Clark, an Amazon senior vice president. Mr. Abimbola said he was excited to be running his own company, which has 40 full- and part-time employees.CreditKyle Johnson for The New York Times

Amazon’s business ties with the Postal Service have come under considerable scrutiny in recent months. President Trump has argued on Twitter that Amazon’s agreement with the Postal Service, which sets the amount Amazon pays the agency, was costing taxpayers billions of dollars.

“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” Mr. Trump wrote in a tweet in April.

While the details behind the agreement are not public, available evidence suggests the opposite: that Amazon’s business has been a boon to the post office. Some current and former White House officials have said that Mr. Trump sometimes blends Amazon with The Washington Post, which has covered his administration aggressively. The Post is owned by Amazon’s founder, Jeff Bezos.

In mid-April, President Trump abruptly issued an executive order demanding an evaluation of the Postal Service’s finances. The order did not mention Amazon, but it was clear that he would like for the panel to substantiate his claims that the financial arrangement between the Postal Service and Amazon, its biggest shipper of packages, is a money loser.

Executives at Amazon dismissed any link between the new delivery program and Mr. Trump’s Twitter attacks about its agreement with the post office.

“This doesn’t play into that debate at all,” Dave Clark, Amazon’s senior vice president of worldwide operations, said in an interview Wednesday afternoon at the Admiral’s House, a historic landmark property overlooking Elliott Bay in Seattle.

Mr. Clark said his job was to think five to 15 years down the road about Amazon’s needs and that the new delivery program was designed to meet future growth and capacity demands. He added that Amazon would continue to use all of its partners, including the Postal Service, to get packages to its customers.

Amazon has been testing a number of programs that could replace or reduce its reliance on its delivery partners. This year, for instance, it plans to test a new service in which company couriers would pick up products from businesses that sell goods through Amazon and deliver that merchandise to its warehouses. Currently, that work is done by UPS, FedEx and other companies.

The new program is also separate from Amazon Flex, which pays individuals $18 to $25 an hour to deliver packages from their own vehicle.

Under the program, individuals will not be employees or even independent contractors of Amazon, but rather, be owners of their businesses, contracted with Amazon to deliver packages. Amazon said its vehicles could be used to deliver packages only from the company, not its competitors.

The program will start in more than two dozen states, many of them along the coasts. But company executives encouraged interested individuals to sign up even if their city or region wasn’t currently listed, because Amazon expects the program to grow.

Amazon hoped in the next 12 to 18 months to have hundreds of people sign up, calling them delivery service partners. If the service is successful, it would most likely be extended to other countries, Mr. Clark said.

And in a bid to attract the nation’s military veterans to the program, Amazon is offering $10,000 reimbursements for qualified candidates to start their own businesses.

All of those who are accepted into the start-up program will get access to a variety of discounts Amazon has negotiated on their behalf, including the Amazon-branded vehicles, as well as fuel, insurance coverage and more, executives said.

One of Amazon’s test participants in its new offering, Olaoluwa Abimbola, said that after arriving from Nigeria, he spent years working at a desk job and, more recently, driving for Amazon Flex. Now, he said, he was excited to be running his own company, which has 40 full- and part-time employees.

“This means the world to me,” Mr. Abimbola said in front of a gray Amazon Prime truck behind the Admiral’s House. “This opportunity provides a future for my family, for my daughters. I’m living my dream and having the time of my life.”

Source: NY Times