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OM in the News: Amazon Moves to Uber-Like Service for Deliveries

October 11, 2015
Amazon is moving to Uber-like delivery services

Amazon is moving to Uber-like delivery services

Aspiring delivery drivers take note: Amazon wants you,” writes the Chicago Tribune (Oct. 11, 2015). The e-commerce company has launched Amazon Flex, which will pay $18 to $25 an hour in exchange for delivering packages for Amazon with your car and smartphone. “Be your own boss: deliver when you want, as much as you want,” says its website. The service, available in Seattle, is coming soon to Chicago, NYC, Baltimore, Miami, Dallas, Austin, Indianapolis, Atlanta and Portland. Amazon Flex is the latest player in the “gig economy,” which also includes ride-booker Uber and on-demand delivery service Postmates.

Amazon Prime Now’s 2-hour delivery is free, and 1-hour delivery is $7.99. Shoppers can track the courier using the Amazon Prime Now smartphone app. “Amazon Flex will allow us to ramp quickly to meet customer demand, which is super helpful in a business like Prime Now where we see interesting peaks in volume,” says the firm’s spokesperson. “It could also be helpful during the holiday season, or during sales like Prime Day, where we experience sharp peaks in delivery volumes.” Amazon now uses carriers like UPS and the U.S. Postal Service.

Drivers can choose any available 2-, 4- or 8-hour blocks to work the same day. In the future, Amazon Flex said it might offer opportunities to deliver on bike or on foot. Deliveries can be picked up at a nearby location. “You’ll receive items to deliver in a local radius, based on length of the delivery block you signed up for,” says Amazon. Besides providing hourly pay, Amazon Flex is offering insurance to participants during the time they are delivering. The insurance includes $1 million in commercial automobile liability coverage, and $1 million in uninsured motorist coverage.

Classroom discussion questions:

  1. Why is Amazon revamping its logistics supply chain?
  2. Will students be attracted to such jobs?
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