Amazon's Enormous Same-Day Delivery Growth Comes At A Price

Note: I chose this as my "photo of the day" for Dec 25, 2012.

Note: this photo was published in an Dec 25, 2012
Note: I chose this as my "photo of the day" for Dec 25, 2012. Note: this photo was published in an Dec 25, 2012 issue of Everyblock NYC zipcodes blog titled "10023." ******************* Note: to see the overall theme, summary description and thumbnail images of the photos in the set of photos in this particular Flickr set, click here.

Amazon hit a new record for its same-day deliveries this holiday season, with 10 times as many items shipped as last year, the company announced in a Friday press release.

With the company racking up all these speedy deliveries, it might be worth revisiting the woes of workers tasked with transporting items from the e-commerce giant’s warehouses to customers’ doors.

In April, The Huffington Post’s Dave Jamieson profiled Myron Ballard, a driver based out of Washington, D.C., for LaserShip, a shipping service hired by Amazon to meet its same-day delivery deadlines.

Technically hired as an “independent contractor,” Ballard received little support for the work he was doing. Delivering about 150 Amazon packages a day might have earned him, on average, $225.

But that money was spread thin covering his expenses.

Per Jamieson’s story:

Ballard had to purchase the cargo van he drives for work. He doesn't get reimbursed for the wear and tear he puts on it; for the gasoline he pours into it on a near-daily basis; for the auto insurance he needs to carry; or for the parking tickets he inevitably racks up downtown. He doesn't even get reimbursed for the LaserShip uniform he's obliged to purchase and wear.

"It's like they want us to be employees, but they don't want to pay for it," the 45-year-old Ballard said at the time.

Amazon has little incentive to change this system. Here’s why it works out so well for the retail company:

For starters, a delivery company using independent contractors avoids paying payroll or unemployment taxes on its drivers, as well as workers' compensation insurance -- never mind basic workplace benefits like health coverage and a 401(k). Such companies also aren't obliged to pay workers overtime under federal law, meaning no time and a half when the delivery day stretches into a 12-hour shift. And since they pay drivers on a per-delivery basis, they don't owe them anything for non-delivery work, like loading the van at the warehouse before hitting the road, a task that can take up to two hours.

Amazon did not respond to a request for comment on Friday.

Make no mistake, Amazon has reason to celebrate success right now. In October, the company faced its biggest quarterly loss in 14 years, leading some profit-hungry investors and pundits to dub CEO Jeff Bezos a “grinch.” Sales growth, especially during the retail industry’s coveted holiday season, is one way of proving Amazon is on the right track. But during a time of year when everyone, delivery drivers included, traditionally celebrates with family, it may be worth looking into the real costs of this same-day delivery service.