Amazon to employees: Quit your job, we’ll help you start a delivery business | Hacker News Reader

Amazon to employees: Quit your job, we’ll help you start a delivery business

arstechnica.com

51 pointscodesternews83 comments

A bunch of delivery companies did this in Germany around 10-15 years ago, basically helping people to start their own companies and then hiring them back via an exclusive business partnership to do deliveries for them. By doing that they conveniently transferred all the risk and hidden costs like depreciation of the delivery vehicle, maintenance, sick & holiday pay as well as social security & retirement fees to their "business partners", which were often not able to properly understand what they got themselves into.

This practice also spread to other industries like cleaning and building maintenance and became so abusive that a new law was introduced to counteract it, giving rise to a new legal term: Scheinselbständigkeit (false self-employment). The law basically states that if you are a one-man business that operates exclusively for a single client over an extended period of time you will gain the status of an employee of that company.

Hence I'm not surprised Amazon is trying to pull this off as well, I don't think they'll have much success with it though, at least in Europe (I hope).

This is known as IR35 in the UK and is currently being implemented in the public sector. Will be enforced in the private sector too shortly, especially if companies like Amazon try to pull of things like this.

There’s also insurance, accounting, etc.. Even the little things like phone bills add up when your “business” has $50k in revenue like the Uber driver I saw on Reuters the other day.

I always wonder if people take into full consideration this gig-economy reskin of commercial driving or not. I maintain a CDL for work I perform at a large truck service center and its involved. Do "amazon drivers" or "uber drivers" even have a commercial drivers license or insurance?

- do they receive regular CDL related physicals that are required by DOT?

- do they receive an automatic drug screen after an accident?

- do they perform the pre-flight check on their vehicles before getting underway?

- are their vehicle logbooks and inspections current? can they produce them if pulled over?

- do they maintain acccurate weight, and accurate logs of vehicle maintenance?

being a commercial driver is much, much more than just clicking "yes" on amazon and hoping for the best.

I think the government should change the regulation (less regulation) to make it easier for people to be commercial driver.

A cdl allows one to drive either 50 tons of truck or a bus full of people.

Do tell me, the current negatives of the regulation regime, and the benefits of the new one? Also don’t forget to provide a realistic analysis of future safety failures and ways in which the old regulations would have prevented that, and why the new ones don’t and why that’s ok.

current negatives ? Increased cost of doing business

Will there slight increase in safety failures ? maybe, I accept that.

A fatal accident can cost a trucking company over 1mil USD. The ATA (American Trucking Association) lobbies heavily to allow under 21-year-olds to carry freight over state lines. There’s no talk about in the upper echelons of US trucking to relax medical, drug, safety, or experience requirements; these companies know it will put them out of business if they hire drivers who get into accidents or even get people killed. There is currently a HUGE lack of qualified, safe trucker drivers in the US. Your suggestion would drive up the cost of freight in the US, and would cost lives.

Further, companies like Amazon will have enough money and influence to absorb the cost of unsafe drivers, while most registered US motor carriers (the vast majority of which are under 100 trucks) will be put at a huge disadvantage vis a vi Amazon. The last thing society needs is Amazon yet again pushing others out of business by being able to race to the bottom and lose money in the short to medium term.

>A fatal accident can cost a trucking company over 1mil USD

That's the deterrent for the trucker to not screwing up.

Are you for real? At best involuntary manslaughter will get you usually at least 12 months in US prison, not to mention any financial penalties from the criminal or civil lawsuit.

Do you have any first hand experience with trucking? It really sounds like you are expressing your opinion from a place of ignorance (feel free to prove me wrong with reasoned argument). My background: I am a founder of a US based software company whose customers are motor carriers.

I find hackernews oddly unsatisfying recently because of comment threads like this. Someone pops in and offers a knee jerk “no regulation” suggestion. Then either people agree with them (yikes!) or there is this type of exchange. Where an expert (and I have a ton of truck drivers in both sides of my family, so while I am not an “expert” by vocation, I am very familiar with issues) points out real life problems and the other person doubles down on crazy.

This means I have to have my “idiot filter” on whenever I’m reading hn.

I'm not suggestion no regulation, rather less regulation. I'm not claiming I'm and expert. Can you maybe please argue the point, rather than resorting to insult.

>Will there slight increase in safety failures ? maybe, I accept that.

So you want to deregulate commercial truck drivers because you feel costs of getting/maintaining a CDl outweigh the safety issues?

Do you have any insight on this at all? Have you ever driven a commercial truck for a living? Do you even know the cost of obtain/maintain a CDL? The average cost of a commercial trucking accident? The average decrease in commercial truck accidents via-a-vis trucking school?

How about commercial pilots? Should we do away with pilot license because the liensure increases business costs notwithstanding increase in safety failures?

Do you think with less regulation suddenly trucker will be more careless ? The burden that the trucker will pay if they involve in an accident still going to be high, if its not already high and assuming they too do not like to die.

Truckers will absolutely become more careless, because when their money (and their employer’s money) depends on how many miles you can push in a set time period, there will be the ultimate incentive to be careless and push the limits.

And here are the incentive for the the trucker to not being careless :

- death

- disabled for life

- life in prison

- monetary damages

- no company will hire you

>Do you think with less regulation suddenly trucker will be more careless ?

I believe with less training and lower standards there will be more accidents?

Historically there were less regulations and more accidents. Licensing is only one component of the safety regulations enacted, but again historically yes without these regulations truckers engaged in more risky driving behaviors.

Again it sounds like you are unfamiliar with the industry.

I'm not suggesting less training or lowering standard, I'm suggesting less regulation.

Company can still provide as many training or requiring as high standard as they want.

One way to reduce risky driving behaviors is to impose high penalty/punishment for risky behaviors.

>I'm not suggesting less training or lowering standard, I'm suggesting less regulation.

Except you want to remove those regulations that include training and licensure requirements.

Rules already exist to penalize CDl holders for poor driving and they are a higher standard/increased penalties compared to none CDl drivers...what we don’t need is allowing untrained and unlicensed commercial drivers, that in no way will improve driver safety.

>Except you want to remove those regulations that include training and licensure requirements.

yes but the company can still train their trucker as much as they want, the trucker can still get training as much as they want.

>what we don’t need is allowing untrained and unlicensed commercial drivers

These untrained trucker won't get hired, do you think you will want to hire untrained trucker ? Regarding the unlicensed, why not ? provided they can prove that they can do the job well and has good track record ?

Regulation sets a floor for the race-to-the-bottom. Companies could set high standards, yet they usually meet the bare minimum. Improving standards costs money. Unless it's a requirement, it gets cut.

Regulation create barrier to entry, not about safety. If safety you want, impose high penalty/punishment for reckless behavior.

Everyone believes they're going to be the lucky ones. Simply imposing high costs doesn't deter reckless behavior. People still drive drunk, jaywalk, drive on bald tires, smoke...all activities known to be dangerous.

Regulation creates a barrier, sure - a good barrier is one which requires training, practices, and equipment to promote safety.

imposing high costs doesn't completely remove reckless behavior but it reduce reckless behavior.

Likewise, with high regulation, there still people who drive recklessly.

Regulation creates a barrier, so its not easy for newcomer to enter and compete.

Becoming a good trucker still requires training, practices, and equipment to promote safety regardless of regulation.

>Increased cost of doing business

Are you sure about that? What would the insurance risk premiums be on letting amateurs drive tractor trailers.

Seems this would simply push the risks (future expense of an accident) on other people of the road.

I don’t have any hard numbers or studies. I am inferring this from the fact that the ATA and trucking lobby hasn’t made a hard push to relax FMCSA safety regulations. Large motor carriers were the first to adopt ELD. They know what regulations to fight and which ones to accept, in terms of what will help their bottom line (and maximize value to their shareholders as many motor carriers are public companies).

I’d rather the government make it more difficult for big companies like Amazon to exploit their workers, as opposed to making it easier for workers to be exploited.

Forcing a full-time driver into a contract role is pure exploitation, given that it absolves Amazon of a certain level of civic responsibility (now the contracting driver isn’t paying himself enough... and Amazon sees a nice reduction on the payroll).

So you want the government to actually care about its citizen well being ? Then do something like basic income instead.

Basic income does not address the fact that many of these regulations are required for the safety of the driver as well as other drivers on the road. Removing those to make the job cheaper to perform and thus more profitable doesn’t make it better for society, regardless of who reaps the profits.

I'm addressing your comment of worker being exploited (not being paid enough).

This was my first comment, but the heart of the exploitation here is that the regulatory burden being placed on the worker IS the exploitation, because the related cost is hidden. Removing the regulatory burden is not the right solution to the exploitation.

If your concern is safety then one of solution is to impose high penalty/punishment for reckless driving.

Amazingly, people often fail to respond to negative incentives, because they think they will be lucky enough to avoid them. See: - heart attacks - lung disease - saving for retirement - vehicle emissions - etc.

And, even if you can’t afford the punishment for killing another human being, you might still be able to afford to take the risk to do so. It’s a sort of lessor version of a free-rider problem.

Even there, this is assuming that people that take on this level of personal liability are even aware that they are taking that risk.

negative incentives works otherwise we wouldn't have it. Does it work perfectly ? no. The goal is to reduce. To eliminate completely maybe impossible.

Preventative medicine is the most effective treatment.

And you cost more because you are subject to these rules and regulations. Amazon will abuse the lack of rules and enforcement on this, just as everyone else that can will do so until we write and codify a law that prevents or discourages it. Sadly, this is how these things tend to work.

I have a CDL (Class A). My understanding is that the requirements for a CDL are mostly around mitigating the risks created by large or hazardous vehicles.

It wasn’t clear for me that the referenced Amazon program would be having drivers operate large vehicles.

Indeed, the USPS doesn’t require its drivers to maintain a CDL and there are large commercial uses of vehicles in the States that do not require a CDL.

This seems like a terrible career move. You have one big customer who has full power over you. Soon they’ll get squeezed left and right. The only way I could see this work would be if they could deliver for other companies like Walmart.

I agree with your sentiment, although I'd be worried if my income was "diversified" by working for Amazon and Walmart.

Uber doesn't work. Lyft doesn't work. Airbnb doesn't work.

Why would it work for delivery?

It works great for these companies and it will work great for Amazon.

Exactly. It's disgusting. Totally unethical.

I think your definition of "work" is different than most other peoples

Work as in a win-win for both the employer and the employee.

And perhaps you mean "most other peoples" [who are on hackernews]

the thing is that a company can take on another customer without repercussion, or employ someone else to do the job. This is what people always fail to understand when discussing contracting v employment. As a contractor, if I get bored of the work, I can hire someone else to do it. Try explaining to your employer that you've hired someone else to do your job for you.

That’s only true if you run a real business. If you do delivery for amazon or drive for Uber most likely your margins are too low to hire someone and I would expect them to have something in the contract that forbids this.

They already prevent it somewhat with a combination of selfies and facial recognition -

https://mashable.com/article/amazon-flex-delivery-driver-sel...

It'll be interesting to see what would happen if these contractors file their taxes as employees. I sure hope one does.

You need the backing of somebody who can pay for lawyers. I am sure that amazon is ready for such a challenge.

If they did have something like that in the contract, it would make the contractors employees, with tax and benefit implications.

When I was software dev contractor I had clauses in my contract that said that I had to perform the work myself.

Great, so you are an employee, and can sue for backwages and back-benefits. If the company specifies how the work is performed (rather than what work needs to be performed for compensation), you are an employee, basically full stop.

Actuually, you don't even need to sue. Just file your taxes as if you are an employee and the IRS will handle the rest.

EDIT: See here: https://www.irs.gov/businesses/small-businesses-self-employe...

> You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action.

Even if technically you're correct, in the best possible scenario it'll take time to get that money back. In the worst case scenario you get involved in a tax dispute that can drag on for however long they can afford to. Meanwhile you don't have a job.

I was fired from my "contracting" job, and the state eventually ruled that I was technically an employee. But I had to wait the longest 6 weeks of my life to find that out, and what if they had not? Or what if they ruled against me, and I had to appeal it? What if my former employer retaliated in other ways? I would have been even more screwed than I was.

I don't disagree. That's why I said you can file your taxes as an employee. Presumably, since he kept the position, he was paid a living wage in cash flow terms. Filing taxes as an employee forces the IRS to investigate, and expend their resources, rather than your own. If they do find misclassification, they will inflict punishment on the company and force them to reclassify any other contractors.

I'm not sure what else you can ask the state for without severely limiting the economy -- any investigation by the state is going to take time and there will be ambiguity. But, if your work was directed explicitly (such as being told you had to do it), you are pretty much guaranteed you are an employee. The IRS is really nice and they will act on your behalf.

In the UK that would make you an employee. It's specifically called out in IR35.

> That’s only true if you run a real business.

What's a 'real business'? In the United States, doing something for cash is an individual, legal right.

> What's a 'real business'?

In this case a real business in the sense that you're legally able to actually hire someone else out and have the margins to do so. A lot of these 'sub contract' out your old job to you new business schemes have a lot of restrictions on what you can do and the company isn't going to be paying as much as it cost to employee you + the cost of running your vehicle (otherwise they wouldn't be saving money really). If you're a 'subcontractor but really you can't afford/can't contractually pay anyone else to do this' you're basically just an employee but paying your own taxes, health insurance, insurance, depreciation, and compliance risks.

> doing something for cash is an individual, legal right

You know plus or minus everything you can't do or a company can't pay you to do because it's illegal.

> In this case a real business in the sense that you're legally able to actually hire someone else out and have the margins to do so.

I think you mean a 'profitable' business then, because several large tech companies have no margins and rely on continued investment. An uber driver is certainly free to seek investment externally to continue to fund themselves presumably.

> You know plus or minus everything you can't do or a company can't pay you to do because it's illegal.

That's assumed, obviously. Just like freedom of religion does not mean you can kill people because your religion says so.

It seems like they may have reached critical mass with the US Post Office and the gig delivery drivers. And they have since rolled out gray vans, maybe they see how expensive all that sunk cost is. And it would be better for someone else to pay it.

This is most certainly a trap.

They're going to start their business, and then Amazon is going to drop the prices they pay them, and the employees will be trapped because of investment of their own money and sunk costs.

DO NOT DO THIS!

Interesting, I wonder if this could be used to dodge the "employee vs contractor" problem that companies like Uber have.

Instead of having 100k contractors that might be employees, convert 100k contractors into 40k small transportation businesses with an average of 2.5 employees each.

I am sure that’s the plan. No health insurance. Easy to get rid of. But they still have total control over them.

A contractor is a business,

Does FedEx not do this already?

FedEx Express / Freight is traditional (union) employees.

FedEx Ground are nonunion independent contractors.

That's an interesting anti-union strategy.

And in a few years we'll get to see why unions came to existence, yay. Hooray for forgetting about history.

Honestly, do people not learn about labor history somewhere in school?

In public schools in the US? No, not really.

The picture from someone who's done doesn't look so good.

https://www.theatlantic.com/technology/archive/2018/06/amazo...

In the future everyone should be a contractor anyway. Health care should be decoupled from employer.

That future is not here and it's naive to think full-time and contract employees should be the ones leading the charge :).

Future is created by what one is doing now.

Thanks for being a trailblazer and not using any employee sponsored health insurance.

Thanks to amazon for accelerating the way.

Amazon once again being a corporate tool and trying to squeeze everyone else involved: this time their employees and the USPS.

There is a great idea present here, which is simply this: Caching items to be delivered locally, but in whatever facilities a local delivery partner would provide (small home, small office, etc.).

I used to think that large retail store partners were the solution to this problem (that is, scaling deliveries beyond centralized warehouses, no matter how large).

But, this is clearly a much better solution because it opens a slew of additional storage/delivery possibilities to be determined by the local delivery providers...

It's sort of like taking a grand problem and outsourcing it to thousands of individuals or small businesses who then solve a small piece of that grand problem in whatever creative ways they can. (Also virtuous in this solution: Autonomy -- authority is presumably pushed downwards to the local providers for various package types, rather than being all centralized at Amazon's warehouses...)

So, brilliant Amazon, absolutely brilliant!

There's nothing in there about eliminating the local warehouses in favor of storing a smattering of items locally in the partners houses/where ever. All this is is replacing the swarms of Amazon vans (and the costs and depreciation of those vans) with their new 'partners' vans. They're basically having people start tiny UPSs or DHLs for a (hopefully for their sake) very small area.

I apologize for asking, but how was it inferred from my comment that local or other warehouses would be eliminated? To imply that they would was not my intention. Amazon has a variety of Amazon-owned store/ship locations, that includes Amazon's warehouses. Local partner store/ship or even just local partner ship locations do not detract from that in any way, although, Amazon could, at its discretion, choose a subset of products to cache at partner's locations, IF the partners had storage space and were willing and amenable to that arrangement...

What I should have said is they're not talking about the distributed warehouse model where all these small partner companies would be storing little bits of inventory.

Sounds like Amazon is making the smart business move and outsourcing one of the hardest parts of its logistics chain to contractors. The $10,000 looks like an attempt to bootstrap the market. I think this is Amazon saying last mile delivery is a huge concern for the company.

In Spain we call this "fake freelancer".

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