Report from the Wall Street Journal
In Brief – New York Mayor Zohran Mamdani is backing legislation to require Amazon, FedEx and other warehouse operators in the city to directly employ delivery workers rather than use subcontractors and other non-employees. Backers of the Delivery Protection Act claim it will curb exploitative subcontracting and reduce traffic accidents. FedEx and Amazon rely heavily on various types of independent contractors in their delivery businesses, while UPS directly employs drivers who are members of the Teamsters union, and the union strongly supports the legislation. Amazon says that it uses dozens of delivery subcontractor firms in the city that together employ more than 5,000 drivers who earn nearly $24 an hour on average, and that those driver jobs could be at risk because the company will move its delivery facilities out of the city if the bill passes.
Context – Amazon’s delivery operation is one of the largest “Gig work” businesses. Its Delivery Service Partners program uses small business subcontractors who lease vans from the company and drive them with a mix of employees and contractors. Amazon Flex is an Uber-style delivery app platform where drivers sign up directly and use their own vehicles. Both programs have faced criticism and challenges globally. Years ago, there seemed to be significant momentum to force “Gig” platforms to classify workers as employees with applicable rights and benefits, but freelance work models that maximize flexibility and independence have proven resilient. The Biden Administration supported classifying gig workers as employees, but legislation stalled after California’s largely Democratic voters soundly rejected classifying Gig-drivers as platform employees in 2020. Uber and Lyft have since agreed to driver minimum wage deals in Minnesota and Massachusetts, and cities including Seattle and New York have regulated food delivery app work. In the EU, the Platform Labor Directive was initially intended to set uniform Gig worker employee classification standards, but the final version left key standards to the member states, with Spain and Portugal acting most aggressively to end Gig-style driver and delivery models.