Amazon.com Inc. is taking a page from the Uber playbook by shortchanging drivers who deliver its packages, according to attorneys embroiled in lawsuits with both companies.
“They realize they can save a whole lot on delivery costs by cutting out the middle man and working directly with drivers,” Shannon Liss-Riordan, a lawyer who represents a group of delivery drivers suing Amazon in Washington, told Bloomberg BNA. A federal judge is currently considering Amazon’s request to dismiss the case ( Rittmann v. Amazon.com Inc. , W.D. Wash., No. 2:16-cv-01554, motion to dismiss filed 12/15/16 ).
The Amazon Flex drivers—like the Uber drivers Liss-Riordan is representing in a separate case—say the company wrongly classified them as independent contractors to skimp on wages and overtime pay.
Amazon Flex operates a lot like Uber and other ride-sharing companies: Drivers take assignments through a smartphone app and use their own cars to pick up and deliver packages within a few miles of local shipping facilities. As in the Uber case—in which a judge recently scrapped a $100 million settlement—the drivers say they should be treated like traditional employees rather than independent entrepreneurs.
Amazon didn’t immediately respond to Bloomberg BNA’s request for comment. The attorney representing the company in the case, Suzanne Thomas of K&L Gates, also didn’t immediately respond to an inquiry.
Amazon last week unveiled a plan to create some 100,000 jobs over the next 18 months. That doesn’t include the hundreds of thousands of people the company expects to see pick up at least some extra cash through Flex and Amazon Mechanical Turk, an online marketplace that connects businesses and developers to tech workers.
Flex is part of a larger move by Amazon to cut out third-party shipping operations like FedEx and UPS by using the company’s own planes and trucks to move the items it sells online. The Flex drivers handle what the company calls “last mile” delivery service, taking packages to customers’ doorsteps.
Amazon promotes Flex driver jobs as side gigs for working professionals or stay-at-home parents looking to make ends meet. Like Uber, they focus on the flexibility that the program gives drivers to pick up work when they want. Drivers are paid $18-25 an hour for multi-hour shifts, which they can take or skip as they please. The drivers—which Amazon calls delivery providers—“decide whether to work, when and where they want to work, how they want to work, what they want to drive or pedal, and what they take to make deliveries,” the company said in a court filing. “Some choose to work sparingly, while others find the work sufficiently lucrative and enjoyable that they make the business decision to sign up for delivery blocks more frequently.”
As independent contractors, the drivers aren’t entitled to workers’ compensation and unemployment insurance benefits and aren’t covered under minimum wage and overtime laws. Liss-Riordan said drivers are often required to work beyond their allotted shift times without pay and that they regularly wind up making less than the minimum wage when accounting for their total hours behind the wheel.
“There’s a critical difference between how Amazon treats drivers and how Uber does,” Liss-Riordan said. “With Amazon it’s even more stark because they work on shift and they get paid by the hour, but it often takes them longer than the shift to finish the work.”
Uber drivers are paid per ride and are not required to work a certain length of time.
Arbitration Clause Worrisome for Drivers
The Amazon and Uber drivers each face a potentially huge roadblock in the form of arbitration clauses that the companies argue require them to pursue their cases driver-by-driver in front of a private judge.
A federal judge in California last year rejected the proposed settlement in the Uber case, saying it undervalued the drivers’ state law claims. The deal would have given up to $15 million in fees to lawyers and spread the remaining money over 385,000 drivers in California and Massachusetts. It would not, however, require Uber to reclassify the drivers as employees.
In the meantime, a federal appeals court in California said Uber drivers challenging the company’s background check policy in a separate case were barred from bringing the lawsuit collectively because of the arbitration clauses in their employment contracts. Amazon is making a similar argument in its case.
Liss-Riordan says a class action waiver in the arbitration agreement for both sets of drivers violates federal labor law by limiting their ability to act collectively. The Supreme Court is expected to take up that very question in an unrelated case later this year ( NLRB v. Murphy Oil USA, Inc. U.S., No. 16-307, cert. granted 1/13/17).