Amazon Invests Billions to Enhance Delivery Services and Support Partners

Amazon is spending billions on improving its delivery services

Amazon has announced plans to invest $2.1 billion in a bid to enhance its Delivery Service Partner (DSP) program, which supports small businesses that handle deliveries. A key component to the latest cash injection will be $660 million allocated specifically to increase compensation for DSP drivers. The change will see the average wage rise by $1.50 per hour to nearly $22 per hour, equating to a 7% year-over-year payrise. The scheme now supports 4,400 small business owners, creating 390,000 driving jobs and $58 billion in revenue for participating companies along the way. Alongside the pay increase, Amazon has also committed to improving the experience for those associated with the package delivery scheme by introducing an app that allows DSP drivers to access up to half of their wages before payday. The app also promises cash rewards, discounts on essentials like prescriptions and gas, bill payment options and savings tools. Other improvements that Amazon will make to the DSP experience include injecting artificial intelligence into its safety analysis of 200 million roads in order to provide 18 million safety cues for drivers by the end of the year as part of the company's effort to create the "safest delivery network in the world." Beryl Tomay, VP for Transportation at Amazon, said: "Virtually every part of our route planning system employs machine learning models to help us generate route suggestions that continually improve the different parts of a driver's experience." Last year, the company rolled out technology to help drivers keep cool in the summer months with smarter route planning. Besides improving the experience for drivers participating in the program, Amazon also hopes that the changes, which bring the total company DSP investment to $12.3 billion since 2018, will improve efficiency and attract new talent in time for the upcoming Christmas season.

Amazon boosts investment in delivery service program

Amazon (NASDAQ:AMZN) announced on Thursday another investment of over $2.1 billion in its Delivery Service Partner program. The e-commerce giant said the funds will be utilized for safety programs, rate cards, training, value-added services, incentives. The company's investments in the small business delivery program now total $12.3 billion over the last six years. "To help DSPs provide greater wages and benefits to drivers, we'll invest an additional $660 million over the next year in DSP rate card increases and bonuses. We anticipate that our investment will help DSPs increase driver pay to a national average of nearly $22.00 per hour, depending on their location, which is a 7% increase over last year." Many DSPs already pay their drivers more than $22 per hour. On the safety front, Amazon (AMZN) said it will use AI and technology tools to identify risk characteristics for 200 million roads, as well as provide 18 million safety cues for drivers by the end of this year.

Amazon Adds Earned Wage Access Offering for Delivery Service Partners | PYMNTS.com

This addition brings the amount the company has invested in DSP since the launch of the program in 2018 to $12.3 billion, Amazon said in a Thursday (Sept. 12) press release. Amazon's incremental investment in the program will support DSP rate card increases, a new earned wage access offering and safety programs, according to the release. "DSPs and their teams go to great lengths to take care of Amazon customers, and that's why we want to support DSPs with our biggest investment yet," Beryl Tomay, vice president of transportation at Amazon, said in the release. The DSP rate card increases and bonuses will amount to an additional $660 million over the next year, the release said. They are meant to help DSPs boost the wages and benefits they offer their drivers, and recruit and retain high-performing teams, the release said. The new earned wage access program offered by Amazon to DSPs is from PayActiv and will allow drivers to access up to half of their accrued wages before payday, per the release. The program will also support cash rewards, discounts, bill payments and a savings tool. On the safety front, Amazon is continuously working on its artificial intelligence and technology tools that are designed to enhance both the safety outcomes and the driver experience, the release said. These tools enhance the company's route-planning systems to produce routes that are easier for drivers, that allow more time for drivers to take breaks, that identify potential safety risks on the road and that provide safer routes. Since the launch of DSP in 2018, the program has helped 4,400 entrepreneurs build and scale their businesses, creating 390,000 driving jobs and generating $58 billion in total revenue for their companies, according to the release. It was reported in May that Amazon is ramping up its logistics expansion efforts to compete with rivals such as Walmart, Shein and Temu. These efforts include acquiring industrial property and restructuring its distribution network to enhance package delivery speed and reduce shipping costs.

Amazon to increase investment in its DSP program by $2.1 billion

Amazon will also launch an app for the DSP's drivers, where they will be able to access up to 50% of accrued wages before their payday. The ecommerce giant said it will use AI to identify risk characteristics for 200 million roads and provide 18 million safety cues for drivers by the end of this year. Amazon's investments come days after a National Labor Relations Board prosecutor concluded that the company should be held jointly liable with a contractor for allegedly using unlawful tactics to discourage delivery drivers in Atlanta from unionizing. Another regional director from the NLRB in Los Angeles concluded that Amazon should be considered a so-called "joint employer" of a separate contractor's employees and thus be obliged to negotiate with unions. The company, however, has said in the past that it does not exert enough control over contractors' drivers to be considered their joint employer. (Reporting by Priyanka.G in Bengaluru and Juby Babu in Mexico City; Editing by Alan Barona)