Amazon has announced a pay increase for its subcontracted delivery drivers in the U.S. as part of a new $2.1 billion investment in its delivery program. Drivers working with Amazon's Delivery Service Partners (DSPs) will now earn an average of nearly $22 per hour, a 7% increase from the previous average of $20.50.
Amazon, which relies on third-party businesses to deliver customer packages, has stated that the wage hike is aimed at supporting its delivery network and ensuring competitive compensation for drivers.
This move follows a similar pay raise for U.S. drivers last year and a recent announcement of increased wages for front-line workers in the United Kingdom by 9.8% or more.
Since 2018, Amazon's DSP program has created 390,000 driving jobs, with a total investment of $12 billion to enhance safety programs and provide incentives for participating businesses.
However, Amazon's business model has faced scrutiny from U.S. labor regulators, who are increasingly challenging the company's classification of drivers as independent contractors. Labor groups, including the Teamsters, argue that Amazon exerts significant control over the subcontracted workforce, potentially making the company a joint employer under the law.
Recent rulings by National Labor Board prosecutors in Atlanta and Los Angeles have favored the view that Amazon should be held jointly liable for certain labor practices related to DSP drivers. These decisions could lead to formal complaints against Amazon if settlements are not reached.
Amazon has defended its position and may appeal any adverse rulings through the NLRB's administrative law system and potentially to federal courts.
