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Amazon relies on some 2,500 delivery service partners (DSPs) to deliver packages. The Teamsters are attempting to organize DSP workers, posing a challenge to the company’s business model.
UPDATE: On Thursday, the Teamsters filed an unfair labor practice complaint against Amazon, as a joint employer, over its failure to recognize the Teamsters as BTS workers’ bargaining agent, failure to execute the collective-bargaining agreement, threats to fire workers for engaging in protected concerted activities, and the holding of captive-audience meetings. The case, and further organizing of DSPs, represents a legitimate liability for Amazon’s subcontracting schemes.
On April 24, Amazon delivery drivers at a company contractor in Southern California announced that they had joined the Teamsters, gaining a toehold in Amazon’s sprawling logistics network. Battle-Tested Strategies (BTS) in Palmdale, California, one of some 2,500 delivery service partners (DSPs) Amazon hires to deliver packages, agreed to neutrality and voluntarily recognized the union.
The following week, 84 delivery workers and dispatchers ratified their union contract with Teamsters Local 396 and BTS. The contract boosts wages to $30 an hour by September; drivers currently earn $19.75. That rate is set by Amazon, one of many aspects of the job the company controls. BTS employees also won the right to refuse deliveries, secured paid holidays—including Martin Luther King Day, Cesar Chavez Day, and Juneteenth—and did not have to accept a no-strike clause.
Workers negotiating a collective-bargaining agreement at an Amazon subcontractor sets a historic precedent. It opens new possibilities for a legal challenge to Amazon’s model of subcontracting out delivery and denying that drivers are its employees, which has in part propelled the company to its commanding position in the logistics industry.
“These workers have been delivering Amazon packages as unionized drivers for a week now,” said Randy Korgan, head of the Teamsters’ Amazon division and organizing director of Teamsters Joint Council 42 in Southern California. “Fulfilling the promise of the contract will require fundamentally changing Amazon’s exploitative business model, and we will keep fighting until that happens.”
But will BTS be out of business before much headway is made? The same day the Teamsters announced the tentative agreement with BTS, Amazon declared the subcontractor “had a track record of failing to perform and had been notified of its termination for poor performance well before today’s announcement.”
Amazon told the Prospect that the BTS contract had been terminated on April 14, and that the contractor had been cited for breach of contract five times in January. The citations, Amazon said, stemmed from failing to follow safety procedures, maintain its fleet, and pay insurance providers. The company also said the contract will end June 24, which provides the 60 days’ notice of layoffs required by the federal Worker Adjustment and Retraining Notification Act.
That contract had been slated to renew automatically when it expired in October. Amazon affirmed this as recently as last November, after the union organizing began, stating in writing that there was “low risk” to BTS’s contract renewal.
BTS owner Johnathon Ervin, an Air Force veteran, disputes Amazon’s claims, saying Amazon offered him a termination settlement, which he has yet to accept. Meanwhile, drivers continue delivering packages. Ervin posted a picture on Twitter April 25 that showed drivers amassed in the parking lot, writing: “Another day, another smile delivered. Our Amazon Drivers are always ready and excited to deliver for our community.”
Ervin said Amazon is retaliating against him because he supported the union drive. “They have complete control over Amazon systems and hiring and firing of drivers,” he said. “But what we see now are retaliatory tactics like the grounding of our vehicles, calling security, those types of things.”
Workers negotiating a collective-bargaining agreement at an Amazon subcontractor sets a historic precedent.
FLEETS OF AMAZON-BRANDED VANS driven by misclassified DSP employees shuttle packages to customers’ doorsteps. To ensure they fulfill its promise of speedy delivery, the company controls the work the DSP drivers perform. Workers have to wear vests and hats emblazoned with the company’s logos. DSP operators must lease Amazon-branded delivery vans through an Amazon-approved vendor. They also must use Amazon’s delivery app, known as the “rabbit,” which tells them what routes to take, how many packages to bring, and when to make the deliveries. Amazon’s control even extends to firing and disciplining DSP workers.
“Amazon, as a parent company, is ultimately calling the shots that impact the working conditions of these exploited, subcontracted drivers,” said sociologist Jake Alimahomed-Wilson, co-editor with Ellen Reese of the 2020 book The Cost of Free Shipping. “The DSP model, under current U.S. labor law, allows Amazon the flexibility to undermine mass union organizing in this sector by limiting the size of DSPs.” The DSP operators can only hire between 40 and 100 workers. Since the DSP 2.0 program was launched in 2019, operators can only own one LLC.
When BTS and the Teamsters sat down to negotiate a contract and began to enforce specific things in it, Amazon’s vise grip was obvious. “We recognized the amount of control that Amazon had in certain areas,” said Korgan. The Teamsters, he added, sent a formal bargaining demand to Amazon, basically telling it: “As a result of you having control according to the DSP, you need to come to the bargaining table, sit down and bargain.”
A 2019 California law established a three-pronged “ABC test” to determine a worker’s status as either an employee or a genuinely independent contractor, making it harder for employers to misclassify employees to insulate themselves from their responsibilities and the consequences of violating labor law. To be considered an independent contractor in California, you must be free from the company’s “control and direction,” perform work that falls outside of the company’s usual business, and be engaged in “an independently established trade.”
Amazon, asked for comment on the bargaining request, denied that the delivery workers are its employees. “Whether the Teamsters are being intentionally misleading or they just don’t understand our business, the narrative they’re spreading is false,” an Amazon spokesperson said in a statement to The American Prospect. “This group of individuals do not work for Amazon.”
The 1.4 million-member International Brotherhood of Teamsters is at a crossroads. New reform leadership and an energized rank and file have taken the wheel and are steering the union in a new militant direction. Newly organized Teamsters, using coordinated bargaining strategies, have won new contracts at Sysco locations in Louisville, Kentucky, and Indianapolis. Last year, they won inflation-busting pay bumps with a strike in Plympton, Massachusetts, combined with other contract wins in Arizona and Syracuse, New York. Nationwide, more than 10,000 Sysco workers are Teamsters.
The union has added 206,000 new members since last year, according to Bloomberg. Though that is likely overstated, there has been growth. But Amazon’s exploitative business model poses a direct threat to the union’s biggest challenge: a contract with United Parcel Service (UPS), which covers 350,000 workers and expires on July 31.
Workers voted April 28 to unionize their workplace with the Teamsters at logistics giant DHL in the Cincinnati/Northern Kentucky International Airport (CVG)—next door to a union campaign spearheaded by an offshoot of the Amazon Labor Union. Amazon workers at the San Bernardino, California, air cargo hub, as part of the Inland Empire Amazon Workers United, have been beating back company retaliation after striking, with support from the Teamsters and the Warehouse Worker Resource Center.
But the closest the Teamsters have come to establishing a beachhead at the e-commerce behemoth was in 2017, when 46 workers at Silverstar Delivery, a DSP in downriver Detroit, unionized with Teamsters Local 337. It was a pyrrhic victory, however. Following the union election, the DSP subcontractor began illegally firing workers, and Amazon later canceled Silverstar’s Michigan contract, reported BuzzFeed News.
The same dynamic may unfold in California. But a convergence of factors points to a potentially different outcome. These include the Teamsters’ new reform leadership; a tight-knit network of delivery drivers with a history of taking concerted activity on health and safety issues; DSPs like BTS that have deep grievances against Amazon; and a friendlier National Labor Relations Board.
If the Teamsters are able to build a network of organized delivery service partners across California, including at critical linchpins like delivery stations, that might create the conditions necessary for the union to break into one of Amazon’s largest consumer markets and its critical last-mile delivery networks.
HEATH LOPEZ BEGAN DRIVING FOR BTS in September 2020, and threw his support behind the union drive. He wanted the decrepit vans in the delivery fleet fixed, and the ten-hour shifts with delivery quotas of almost 400 packages trimmed. He said Amazon was “strong-arming” workers with the quotas, punishing them for bringing back undeliverable packages at the end of a shift.
“Most of our vans didn’t have working air-conditioning units,” said Lopez. “Even during the hottest summers, you could open up the back of the vans and it would just feel like sitting in a sauna.” In the few vans that did have air-conditioning, it wasn’t strong enough, he said: “I would have to put my face up against the air vent just to feel the cold air.”
In August 2022, Lopez and his co-workers presented Amazon with a list of demands outlining these grievances, and threatened to walk off the job if they went unmet. In response, Amazon fixed some of the vans and provided workers with cooling rags and water—which the company limited to two bottles, even in the sweltering heat of inland Southern California.
Yalonda M. James/San Francisco Chronicle via AP
Labor and community coalition members, including the Teamsters, rally in front of San Francisco’s City Hall to urge passage of a temporary moratorium on Amazon and other parcel delivery service facilities, March 22, 2022.
Almost immediately, Amazon arranged for Ervin to participate in a union-busting training, where, he says, Amazon told his representative: “If you unionize, your contract will be cut.” In PowerPoint slides shared with the Prospect, Amazon advises DSPs to tell drivers about the low union density in the private sector. The rest of the slides run through the usual union-busting talking points, including that labor law requires unions and employers to bargain in good faith, but doesn’t obligate the employer to reach an agreement. It also advises them to share their presumably bad personal experiences with unions, including those of family members.
Around that time, Ervin began to have concerns about his ability to operate what was ostensibly his business. “Sometimes, I feel like an employee,” he said, adding that Amazon fired three of his own drivers. He also shared his drivers’ concerns around heat and the condition of aging vehicles.
“I care about the people that work for me, and if they have safety concerns, they need to be addressed, and concerns about the amount of package counts,” he said. “Amazon isn’t listening.”
But Amazon waited Ervin and the workers out. “They needed me to get through peak,” he said, describing Amazon’s Prime Day promotional sales rush, which ran October 10-12 last year, along with the holiday season. “They knew the union was coming. But they didn’t start with all intensive breach of contracts until January.”
In October, Amazon partnered with Ervin for a toy drive with the U.S. Marine Corps’s Toys for Tots program, according to emails shared with the Prospect. And in November, Ervin’s business review showed a low risk of his contract being terminated. By that point, according to documents shared with the Prospect, BTS drivers had delivered over seven million packages since the company launched and earned 18 “Fantastic Plus” ratings, a score that nets DSPs financial bonuses.
ERVIN STARTED BTS AFTER HE SAW an online ad for the DSP program in 2018, aimed at military veterans wishing to become entrepreneurs. Amazon advertised on the federal Department of Veterans Affairs job board and the website Military.com, emphasizing the need to fulfill orders for essential items. “Assets used to deliver Amazon’s wares will be used for essential items first,” said a typical online ad. “That’s why Amazon needs more delivery assets, and it wants American military veterans to be those assets.”
Amazon launched the DSP program in 2018, luring veterans like Ervin with the promise of becoming small-business owners. “This is all about scaling cost effectively,” said Dave Clark, senior vice president of Amazon Worldwide Operations, at the time. “We are going to have to meet this growth, and it’s outpacing the growth of our core providers.”
It took Ervin about a year to go through the process, but he stuck it out because he was told he’d be able to make $75,000 to $300,000 a year. DSP managers actually earn between $31,500 and $64,500, according to a class action suit filed on behalf of 2,500 DSPs in the U.S. district court in Seattle. Two DSPs in Oregon have also filed class action lawsuits against Amazon, contending that the company’s stringent contract obligations left them on the hook for overtime bills and vehicle upkeep, crushing their profits.
“I grossed $3 million from Amazon,” a DSP owner told Protocol reporter Anna Kramer. “And somehow, after I pay for everything, I end up making less than $90,000.” Even that sum was illusory, as half of it came from federal Paycheck Protection Program loans. “If I hadn’t gotten a $40,000 PPP loan, my company would have had to shut down. I didn’t have enough working capital,” the DSP owner continued.
“Instead of paying DSPs fairly, Amazon relied on the federal government’s Paycheck Protection Program (PPP) to keep DSPs operational, thereby using taxpayers’ money to pay for its operations,” wrote the attorneys representing North Carolina DSP owners in another class action suit. “Nearly all DSPs are currently operating at a loss due to Amazon’s control of the DSP program and rely on PPP funds to stay afloat. Amazon knows this because it performs an annual financial review of most DSPs’ accounting records.”
“Look at the profile of the average DSPer,” said Korgan. “They just see this business opportunity as an entrepreneur. I bet you most of them aren’t even out of the [transportation] industry because if they came from the industry, they wouldn’t even agree to the contract Amazon gives them.”
Amazon designed the DSP program to make it virtually impossible to leave voluntarily. “Amazon, through Element [the van rental company], charges $6,000 on average per Amazon-branded vehicle upon termination of DSP contracts. As such, many DSPs are left with over $120,000 in ‘exit fees,’” wrote attorneys representing the North Carolina DSP owner.
Amazon designed the DSP program to make it virtually impossible to leave voluntarily.
“Any mistakes the vendor makes, Amazon backs up the vendor because they’re profiting,” said Ervin. That could push DSP owners to support their unionizing workforce. Class hatred is as good as any high-minded principle of moral suasion.
Ervin opened his first DSP in El Monte, California, in 2019. At the height of the pandemic, Ervin was selected to help launch the DAX8 delivery station in Palmdale in June 2020. “I think you’ll be a great fit for this opportunity due to your proven leadership, strong performance, and clear commitment to keeping safety a top priority,” wrote an Amazon Logistics business coach in an email shared with the Prospect.
Ervin was profiled in Amazon Logistics’ “DSP Weekly Delivery” newsletter in August 2020, as part of National Black Business Month. “I am a futurist and Amazon is at the tip of the spear with technology in this disruptive economy,” he said, according to a copy of the newsletter shared with the Prospect. “Those who disrupt in this environment, succeed. I also have a fascination with being able to click on something online and it’s at your door an hour later.”
WORKERS BEGAN FEELING THE HEAT soon after the union victory. “They’ve bombarded us with more packages,” said Lopez. “It’s gotten to where some of us are filling up our vans with a lot of oversized packages, which don’t fit in those totes that we carry around with littler packages.”
Lopez describes situations where he’s been asked to haul 20 oversized boxes into his small van, which forced him to ask the dispatcher to send someone for help. That delay would put him in a position to be disciplined. “When we’re behind, that’s when [Amazon] gets on our dispatchers, and then the dispatchers get on us. Why are we behind? Why are we being slow?”
Ervin cited other retaliatory tactics. “[Amazon has been] inspecting our vehicles and not inspecting other delivery service partners,” he said. “They were uniform inspecting—and getting written up for nuisance issues. We felt we’re being targeted.”
The grievances of Ervin and workers like Lopez suggest a temporary alignment of interests against Amazon. Jeffery Hermanson, a former organizer with the International Ladies Garment Workers Union (ILGWU), points to historical parallels with garment production networks and the web of interests between clothing brands and cutting and sewing contractors. “In a lead firm/subcontractor system, there is a contradiction between the interests of the lead firm and the interests of the subcontractor,” said Hermanson, who now works with the International Union League, an organization of garment and textile unions in Asia, Latin America, and the Middle East.
“The workers’ interests are in conflict with both, of course, but there can be a partial and tactical unity of interest between the workers and their direct employer, the subcontractor, in struggles with the lead firm. The genius of the ILGWU was to understand this and to use the organized power of the workers to get the subcontractors to form an association, make a deal with the union, and then stand together to confront the lead firms,” he continued. “This is what happened in the 1982 New York City Chinatown general strike, when 10,000 Chinese garment workers in 400 garment factories walked out and forced their direct employers to make a deal, and then confronted the Seventh Avenue brands with a deal they couldn’t refuse.”
The idea behind having thousands of DSPs is that any one is prevented from gaining leverage. But if the Teamsters can organize many DSPs in a particular region and force coordinated representation petitions with the NLRB on joint employer status, Amazon may not be prepared to counteract it. Starbucks Workers United has used this strategy effectively in their battle with the coffee giant.
Ultimately, the fight against Amazon will rest on worker power. “Regardless of what scam Amazon created with these layers of dumping responsibility onto other business owners and crushing small businesses, the workforce still has the ability to take control,” said Korgan.
“I’ve been in positions where I’ve always felt like the little man,” said Lopez. “And I want to contribute something to the other little guys that are too scared to voice their concerns, and inspire more people to stand up and fight.”
Asked if he considers himself an Amazon employee, he said, “We would want to be, but we’re not technically employees of Amazon because we’re contracted through a third party. But [Amazon] makes it seem like anything that they say is the final word.”
David Dayen contributed reporting.
