Amazon launches Uber-esque delivery service in Australia, amid safety and pay criticism in the US

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E-commerce giant Amazon has today launched its delivery service in Australia, opening the doors for individuals to deliver its packages in an Uber-style arrangement.

Called Amazon Flex, the program, which is already live in the United States and eight other countries, will see one of the world’s largest technology businesses wade into the murky waters of the gig economy locally, setting the stage for further scrutiny over the pay and conditions of drivers in Australia.

It comes amid reports that Amazon Flex drivers in the United States are dealing with inconsistent pay, an inability to take breaks on the job and a need to tag-team deliveries to meet the e-commerce giant’s tight deadlines.

Similarly to Uber and other gig economy services, Amazon Flex operates through a smartphone app, which serves delivery partners with four-hour “delivery blocks”, during which time drivers deliver packages from pick-up points in Melbourne and Sydney.

Amazon this morning confirmed drivers will be engaged as independent contractors, in the same vein as Uber and Deliveroo.

“As customer demand and delivery needs continue to grow in Australia, Amazon Flex gives us the agility to supplement the work we do with our existing carrier partners so we can speed up delivery times and respond to peaks in demand,” Amazon Australia director of operations, Craig Fuller, said of the new service in a statement circulated Wednesday.

“Amazon Flex gives us the flexibility over time to unlock customer delivery benefits we haven’t even thought of yet.”

Launched in the United States as an on-demand contract service back in 2015, Amazon Flex says most of its North American gig economy workers earn between $15–19 an hour, paid in a lump sum per delivery block completed.

In the US, Amazon has used the Flex service to help it speed up delivery times in major cities, having moved to same-day delivery on millions of items in recent years.

Drivers are also used to facilitate returns, which has long been one of the most difficult issues facing e-commerce companies globally, due to the high costs associated with dedicated carriers or employed drivers taking packages back.

Overseas Flex drivers work in three- to six-hour blocks, but typically only find out how many packages they’ll be asked to deliver once they arrive at a pick-up point, American outlet CNBC has reported.

One delivery driver who spoke to CNBC for its 2019 story on the service was assigned to deliver 45 packages across 36 miles (57km) in under three hours in return for a US$67 ($97) payment.

Once expenses were taken into account, the driver said that particular block was “not worth it” and declined to take the job, for which he was given a warning.

Drivers in the United States who are given two warnings, known as tickets, can have their accounts deactivated.

Contractors frequently take to a dedicated subreddit to express their frustration with Amazon Flex, posting reports of low and declining pay recently.

Others CNBC spoke to said their pay under Amazon Flex has been more consistent, highlighting the disparity of conditions and experiences for workers in the gig economy globally.

The Flex model is notably different from the services offered by Uber and others, where drivers are paid for each individual trip, rather than a block of work that includes multiple deliveries.

Amazon Flex drivers in Australia, who will provide their own vehicles, will be given estimated duration and minimum payment terms for each block in advance.

Amazon Australia did not provide any estimates for prospective driver earnings on Wednesday morning, but did say workers will receive payments weekly by direct deposit.

Drivers will be subject to background checks, but beyond this, Amazon Australia did not specify further security or safety arrangements.

In the United States, there have been widespread concerns about driver safety in the wake of artist Ice-T putting the e-commerce giant on blast last year, saying he nearly shot one contractor because they weren’t wearing an Amazon uniform.

Tens of thousands of Australians have flocked to the gig economy for work in recent year as multinational technology companies such as Uber have launched their services Down Under, with more than 100 digital platforms being used to generate income, according to Queensland University of Technology research.

But while the contractor-based arrangements offer previously unheard of flexibility to workers, as well as solutions to thorny problems such as last-mile delivery for retailers and technology giants, there are longstanding concerns about pay and conditions for drivers, many of which are young workers aged between 18–34.

Driver surveys and anecdotal reports indicate many workers are being paid less than the minimum wage, while missing out on a raft of entitlements reserved for employees, such as casual loadings, superannuation and sick leave.

The resulting controversy has spawned a renewed debate about the distinction between independent contractors and employees under Australia’s workplace laws, leading to investigations by the Fair Work Ombudsman and ongoing legal proceedings.

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