Amazon.com, Inc. (NASDAQ:AMZN) plummeted over 7% in previous trading session as the company will push the boundaries of its ties with the independent firms who transport its packages across much of the country and, increasingly, the world, by sponsoring a series of projects totaling more than $450 million that will benefit the drivers employed by those companies.
The extra investment in the Delivery Service Partners program, announced Tuesday morning, is in response to concerns of tough working conditions and wage disparities among delivery drivers. It comes as national labor officials indicate an interest in finding a mechanism to assist Amazon delivery drivers in organizing.
From a legal standpoint, Amazon’s issue is to avoid becoming so involved in the DSP firms that it essentially changes its relationship with them. The independence of these organizations protects Amazon from many of the financial and legal risks associated with directly employing drivers.
The statement on Tuesday consists of three major components: A new initiative called Next Mile will provide up to $5,250 per year for academic study to employees of participating delivery businesses.
Amazon will add a 401(k) plan to “the array of services accessible to DSPs,” giving the firms with an estimated $60 million in matching employee contributions during the first year of the program.
According to the corporation, it would give “further rate increases for DSPs to offer competitive compensation to their drivers.”
Amazon released new figures last month about the growth of its Delivery Service Partners program, claiming that 3,000 independent companies now deliver more than 10 million packages for Amazon every day, employing 275,000 people and generating a combined $26 billion in revenue over the last four years.
One prospective case challenges Amazon’s DSP firms’ legal categorization, claiming that they are essentially treated as franchisees without the privileges that would accrue from being being designated as such.