Amazon ramps up gig economy with Delivery Service Partners fleet program

Massive sales volume increases and a need for delivery alternatives has spurred Amazon to create its delivery Services Partners program, helping fleet owners start, set up, and manage independent businesses of up to 40 delivery vehicles.
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Amazon has announced a program to help entrepreneurs build their own delivery fleets, taking internet economy opportunities to a new level for aspiring small business owners. The Amazon Delivery Service Partners program is designed to help independent contractors operate up to 40 vehicles delivering products to Amazon customers.

According to Amazon, the company will take an active role in helping would-be fleet owners start, set up, and manage their businesses. Entry costs for Delivery Service Partners start at $10,000 — an initial expense Amazon will reimburse to qualified military veterans from a specifically allocated $1 million fund.

Amazon estimates successful fleet owners with a full complement of 40 Amazon-branded delivery vehicles can earn up to $300,000 in annual profit.

Amazon’s program support includes delivery volume, access to the massive online retailer’s delivery technology, extensive hands-on training, and discounts on required business expenses including vehicle leases, insurance, branded uniforms, fuel, and more.

To be clear, the new Delivery Service Partners program is not the same as Amazon Flex, a more traditional-style, Uber-like gig economy program. Currently operating in 50 U.S. cities, Flex drivers set their own hours and use personal vehicles to deliver packages, all managed by a Flex smartphone app. According to Amazon, drivers in the Flex program make $18 to $25 an hour.

Independent contractors in the new Delivery Service Partners program, by contrast, will run full-time businesses with ongoing expenses for vehicles, employee salaries and benefits, and a myriad of additional business costs. Partners will hire, train, and manage their own teams of drivers and other personnel, setting routes based on the deliveries allocated daily by one of 75 Amazon delivery stations.

The Delivery Service Partners will not replace Amazon Flex or current delivery partnerships with the United States Postal Service, FedEx, and UPS. Amazon’s rapidly growing business volume justifies another layer of local delivery service, according to the news release.

“We have great partners in our traditional carriers and it’s exciting to continue to see the logistics industry grow,” said Dave Clark, Amazon’s senior vice president of worldwide operations. “Customer demand is higher than ever and we have a need to build more capacity. As we evaluated how to support our growth, we went back to our roots to share the opportunity with small- and medium-sized businesses. We are going to empower new, small businesses to form in order to take advantage of the growing opportunity in e-commerce package delivery.”

Olaoluwa Abimbola, a Delivery Service Partners beta tester, is an early program success story. “I had prior experience running my own business, but not in logistics,” said Abimbola. “I was driving for Amazon Flex when I learned about the opportunity to start my own delivery company. Backed by Amazon’s resources and logistics experience, and its encouragement to ‘learn while I earn,’ this opportunity was a no-brainer. In just five months, I have hired more than 40 employees, and it’s encouraging to know that any driven individual can use Amazon’s support and the Delivery Service Partner community to build a successful, thriving business.”

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