Amazon faces questions over delivery driver scandal
Afjal Gori’s eyes filled with tears as he talked about having to choose whether to eat that night or fill his delivery van with petrol. The driver had just been docked another £100 by his employers at SEP Logistics for making an Amazon delivery three minutes before the scheduled time.
As a result of the hefty fine he would be taking home just £46 for a 10-hour shift. He would have to work for even longer that week to make up the money he thought he would be receiving before the punitive penalties. “I am becoming so depressed about it,” he said. “It’s exploitation.”
The Sunday Telegraph revealed this weekend that SEP Logistics, which delivers Amazon’s Fresh and Prime Now goods across London, had been running a punitive regime that left many drivers earning less than the minimum wage.
As well as fining drivers £100 for “early” deliveries, the company also levied charges including £25 if drivers made a delivery two minutes outside a window and £25 for a “no-show”. Workers had to cover the costs of van rental, petrol refuelling and vehicle insurance. This meant that although drivers could, in theory, earn £12-anhour with SEP Logistics, they often made well below that because of the excessive charges.
The harsh fines were coupled with a brutal working culture that resulted in drivers at SEP Logistics being verbally abused if they missed their delivery deadlines because of traffic or were responding to a customer request. One message to Mr Gori, seen by The
Telegraph, read: “You are an idiot … U (sic) have just done an early delivery and that means £100 fine.”
When The Telegraph showed Amazon the evidence of the fines, the online giant acted quickly. Within 24 hours of threatening SEP with terminating its contract, SEP had pledged to end the “flawed” policy and refund drivers all historical fines. However, the investigation has raised further questions about Amazon’s business model and why the $542bn (£413bn) company is relying on outsourcing deliveries to small logistics companies rather than building its own fleet of vans and growing staff. “If I was a billionaire like Jeff Bezos, why would I take the risk?” asks one rival retail boss.
Amazon commented that it regularly audits all its third party firms and says that it “requires all delivery companies working on our behalf to meet our supplier code of conduct requiring a respectful work environment and competitive pay”.
Amazon also says that the decision to outsource to smaller delivery companies was a result of wanting to be able to deliver goods on Sundays. It then asked them to make same-day deliveries. But analysts have argued that, despite Amazon’s famously ambivalent approach to making a profit, the decision to outsource to smaller firms is driven by cost.
By contrast, UK supermarkets that compete with Amazon’s Fresh service – including Ocado, Tesco, Sainsbury’s and Asda – have fleets of vans and all employ their own drivers, paying £7.50 an hour according to the new living wage. The growing threat of Amazon has also changed the dynamics of the industry, resulting in them slashing jobs to compete.
Meanwhile, Amazon regularly issues press releases celebrating the creation of jobs at its warehouses and offices. What is less clear is how many subcontracted workers it relies on to support its growth.
“Amazon has been seduced into keeping up its level of growth at a time when its infrastructure hasn’t caught up,” says Richard Hyman, an independent retail analyst. “So they are looking for the shortest way to maintain growth.
“The reality is that Amazon does this by cutting corners and doing brand damaging things, like subcontracting, but it is an unstoppable force.”
Amazon has been keen to distance itself from the treatment of delivery drivers, emphasising that they were employees of SEP – a third party – not Amazon workers. However, Hyman says this is an attempt by Amazon to “have its cake and eat it”.
For example, when Amazon launched of AmazonFresh UK last year, the 735-word press release about the one-hour and same-day speedy service didn’t mention of the use of third party providers, despite “fast delivery options” being lauded as the key benefit.
“Subcontracting the relationship with the customer is dicing with death,” says Hyman. “The customer doesn’t care that it’s a middleman bringing their Amazon goods to the door, as far as they are concerned they are buying from Amazon.”
The rising trend of big businesses outsourcing deliveries and the treatment of workers in the growing gig-economy has already led to the Government’s Taylor Review.
“Exploiting workers cannot be a competitive advantage,” says Frank Field, chairman of the Commons work and pensions committee.
Asked about the treatment of delivery drivers for Amazon services, Diane Nicol, a lawyer at Pinsent Masons, says: “What Taylor wants to achieve is fair and decent work and it appears this is not an example of work that is fair and decent.”
Amazon has recently introduced a “Flex” delivery, supported by freelance, self-employed drivers. According to Amazon the job “is a great opportunity to be your own boss”. London buses are also being mooted as a way to transport parcels around the city, partly driven by the growth of Amazon.
The move cements the online giant’s use of subcontracting, suggesting that for all its billions of dollars Amazon is not prepared to pay for its own fleet of vans any time soon.
An employee of Amazon in its warehouse in Peterborough. The company’s contractors face criticism over their employment practices