Amazon has announced another pay increase for its subcontracted delivery drivers in the US, who work under the company’s Delivery Service Partner (DSP) program.
This move comes as the company faces growing unionization efforts and scrutiny from labor regulators. The average hourly wage for these drivers will rise to nearly $22, up from $20.50, reflecting a 7% increase. The pay boost is part of a larger $2.1 billion investment by Amazon aimed at supporting its delivery program.
The DSP program, which was launched in 2018, allows third-party businesses to handle the “last-mile” delivery of packages from Amazon warehouses to customers’ doors. These delivery firms are not directly employed by Amazon but are vital to the company’s logistics operations, which deliver millions of packages daily. Since its inception, the DSP program has created 390,000 driving jobs, with Amazon investing a total of $12.3 billion to support these small businesses.
This recent pay increase follows a similar move Amazon made last year, demonstrating the company’s ongoing response to union pressures and labor concerns. In the United Kingdom, Amazon recently announced wage increases of 9.8% or more for its frontline workers, indicating a broader trend of pay enhancements across its global workforce.
The decision to increase wages also coincides with Amazon’s annual contractor conference, Ignite Live, where it engages with DSP owners to discuss business strategies and support. Beryl Tomay, Amazon’s vice president of transportation, emphasized that many DSPs are already offering wages higher than $22 per hour and highlighted the company’s commitment to helping delivery partners recruit and retain high-performing teams.
However, this pay boost comes amid increasing pressure from labor groups like the Teamsters Union, which has been leading efforts to unionize Amazon’s delivery workforce. These groups argue that despite being employed by third-party companies, delivery drivers operate under conditions largely controlled by Amazon. From setting delivery targets to monitoring performance and determining delivery routes, labor advocates claim Amazon acts as a “joint employer,” a designation the company has resisted.
Labor regulators, including the National Labor Relations Board (NLRB), have recently ruled in favor of this argument. In several cases, NLRB prosecutors determined that Amazon should be considered a joint employer of its subcontracted drivers, which could obligate the company to engage in union negotiations. If a settlement is not reached, the issue may proceed to litigation in the NLRB’s administrative law system.
As Amazon continues to face pressure from unions and labor regulators, it remains committed to its DSP program. Alongside wage increases, the company is investing in safety and technological improvements to enhance driver experiences and address concerns related to working conditions. With over 3,500 DSPs operating since the program’s launch, Amazon’s focus is on maintaining high standards for delivery services while adapting to the evolving labor landscape.
In addition to wage increases, Amazon has introduced services like PayActiv, allowing DSP drivers to access up to 50% of their accrued wages before payday. The company has also implemented advanced technology to improve route planning and ensure driver safety, including predictive models to identify potential risks on the road.
The Associated Press, CNBC, Amazon contributed to this report.
