Amazon Delivery Companies Are Being Crushed by Debt | Hacker News Reader

Amazon Delivery Companies Are Being Crushed by Debt

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62 pointsilamont18 comments

How can anyone blame Amazon here? They saw the massive success of labor exploitation that Uber and the gig economy was enjoying and had to jump in, too. Any good monopolist should feel obligated to step on others to help themselves. How these modern day robber barrons have such amazing PR is beyond my comprehension abilities. This seems the case within tech circles (even when it is well known that they are hostile towards their own white collar employees) and across the general public.

The $0.10/fee per delivery, with ~150 deliveries per route and up to $0.15 /unit bonus (that number is probably astronomically hard to achieve) seems like peanuts? Does a route only take an hour to complete? If that is the case, then Amazon probably just wants so much excess capacity so as to be detrimental to the contractors. Google's Leapforce/Lionsbridge followed this same model for search quality raters-- hiring more and more raters, leading to an excess of raters, causing many to abandon the platform due to insufficient work volume (paid per piece) and subsequently lowering per rate fees for the remaining raters. It just seems like our gradual slide back into serfdom.

I also don't understand why they're complaining that Amazon doesn't pay for damage to the vehicles. I mean... If I hire a small business to do something for me, I wouldn't pay for their car damage or insurance either, that's part of their business risk.

These guys agreed to deliver a service for a certain price, that price wasn't profitable enough so they should dump Amazon and look for other customers.

Yeah, but it also seems like Amazon owns the van leases, owns the repair/maintenance contract, and specifies most of the policies/operations, so there are very few parameters for cost management. It's not like they're contracting with a truly independent courier/delivery company. So Amazon offloads the risks (or even profits by them in the case of vehicle repairs) and leaves a sucker holding the bag.

Obviously "business owners" should figure this out before committing to anything but the whole thing seems remarkably scummy in the "you shouldn't have taken a job in the coal mine since you knew company-store food prices exceed wages" sense

I don't understand why these contractors would keep going when it's so clearly a toxic hostile exploitive relationship. It doesn't sound like the company owner in the article was desperate or destitute, he basically took on massive debt for Amazon with no benefits...

I did some back of the envelope math on these a few years ago based on Amazon's truck numbers and proposed profit figures and they were between $7.18 to $28.74 per day per driver. This was based on Amazon's optimistic figures.

With Amazon putting those numbers in the proposal, the real numbers would almost certainly be worse. Between minimum wage and gas, that margin is eliminated.

These are the urban equivalent of the contract chicken growers. Give them a flat rate and make them absorb increasing costs.

Surely the cited 0.10 USD per package delivered, plus fuel expenses, must be a typo?

Probably not, Amazon's goal is to pay under the actual cost of delivery by offloading deliveries to these 3rd party companies.

And these 3rd party companies are not true contractors. Amazon is deeply involved in their day-to-day operations.

To Amazon, DSP's are just useful fools who will destroy their credit and go into bankruptcy to support what Amazon knows to be an unsustainable business model.

"Your margin is my opportunity." If there were money to be made doing it, I can easily see a Amazon subsidiary squeezing Element (the van company) for their last little drop of margin, and then the Amazon sub doing it themselves.

Or...Amazon is already squeezing Element, and Amazon just wants semi-intelligent meat sticks to drive the vans and carry packages. And because even minimum wage is too much to pay...

How can someone with an MBA and 50+ employers be running a business as a personal liability instead of an LLC?

Is Amazon's business model basically arbitraging overconfident people who don't know how to properly set up a business and run the numbers?

Banks will not loan money to a new business entity without someone personally guaranteeing the loan or offering collateral.

Regardless, he clearly over extended himself if he's facing bankruptcy after the failure of his business. I could see a line of credit large enough to cover payroll for 90 employees easily putting him in over his head.

The drivers would make more money doing doordash

Smells like one of those pyramid schemes. For a low investment of $10k you can be a millionaire.

Never, never start a business that solely depends on another business that you don't control.

I learned that one the hard way too a long time ago.

But finding a viable business niche that doesn't depend on some quasi-monopolist is getting harder every day.

Wow it sounds like we need antitrust regulations

Reminds me of this video on 'Chain Restaurants That Vanished Across America' I ran across earlier today. https://www.youtube.com/watch?v=ib2zljzT4P4

'Hitching your wagon to a star' has always been risky. Given Amazon's history? Whoa, would never want to be there.

This is not so correct and greatly over generalized. If this were true HVAC install companies would not be started because they depend on the manufacturers. Another example is the automotive supply chain Companies. If you meant don’t start a business that dependent on a single business that’s probably a better way to put it.

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