Amazon Looks to Use More Contractors for Grocery Delivery Inc. Prime Deliveries As Workers Demand Better Pay

Photographer: Andrew Harrer/Bloomberg Inc. is experimenting with a new program that pays independent contractors to fetch groceries from shelves in Whole Foods stores and deliver them in their own vehicles.

The move may reduce the online retail giant’s reliance on employees who are eligible for medical insurance, sick pay and other benefits.

Amazon is encouraging Flex drivers — contractors who make deliveries in their own cars — to try the new program. These people currently drive groceries to customers’ homes, while the products are gathered and bagged in stores by Amazon employees earning at least $15 an hour. The test will require Flex drivers to do the picking and packing, too, according to correspondence reviewed by Bloomberg.

If the program catches on, it could help Amazon control costs by limiting the number of employees who are eligible for benefits. It also gives the company flexibility to adjust to spikes in demand since it can summon more Flex drivers for individual jobs quicker than it can hire and train new employees.

Amazon did not immediately respond to requests for comment. On a website describing the new Shop and Deliver program, the company said it will provide Flex drivers “with a new flexible earnings opportunity.”

Gig-economy jobs have been criticized for low pay and a lack of benefits. But demand for these roles has increased as millions of people lose full-time jobs in the pandemic-fueled recession. Use of ride-hailing apps such as Uber and Lyft is down, which has pushed many drivers to seek work delivering online orders from stores and restaurants.

Read more: Amazon Drivers Are Hanging Smartphones in Trees to Get More Work

While the new program appears to be partly designed to limit full-time employees, Amazon also announced plans on Monday to hire 100,000 workers to meet a surge in online shopping tied to the pandemic. Amazon had 876,800 employees at the end of June.

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