Amazon Announces Plan to Increase Pay for Contracted Delivery Riders

Amazon has unveiled plans to increase pay rates for contracted delivery drivers, investing a substantial $440 million over the next year to make it happen.

While the exact bump in pay remains undisclosed, Amazon expects US drivers to earn an average of $20.50 per hour, according to the Associated Press. Many of Amazon's delivery service partners (DSPs) already offer rates surpassing this average.

Although the specific minimum pay for drivers nationwide was not shared, select stations reportedly provide at least $20 per hour, as stated on the company's website.

Amazon's Delivery Service Partners Program

Initiated in 2018, Amazon's delivery service partners program aimed to reduce dependence on external carriers like UPS and FedEx. In the past half-decade, this program has seen 3,500 firms joining, which resulted in the creation of 279,000 delivery jobs worldwide.

While Amazon allocates funds to cover pay and associated expenses for each route given to these firms, some have voiced concerns about profitability.

This development aligns with increased attention from the International Brotherhood of Teamsters towards Amazon's delivery workforce. Over recent months, Amazon drivers and dispatchers from a California-based unionized delivery firm have been picketing company warehouses, urging negotiations.

According to Amazon, the pay raise will serve as an incentive for DSPs to both attract and retain employees. Additionally, the company will invest an extra $400 million to facilitate childcare support and expand educational opportunities for its employees seeking accredited courses.

This investment will also cover safety and training initiatives, furthering Amazon's commitment to employee welfare.

Smart Tool of Amazon

In related news, Amazon is poised to introduce a smart tool to streamline the process for sellers listing products on their platform. This tool, powered by an advanced AI, is designed to simplify the task of creating product descriptions.

Sellers can provide a brief description of their product, and the tool will swiftly generate a comprehensive product listing, including title, description, and key points.

While sellers can review and make adjustments if necessary, most found the generated content satisfactory without the need for revisions. This feature was unveiled during Amazon Accelerate, an annual conference for the company's third-party sellers.

Amazon's Vice President, Mary Beth Westmoreland, emphasized that this tool will not only streamline the listing process for sellers but also enhance the shopping experience for customers by providing more comprehensive product information.

"This is just the tip of the iceberg on how we plan to use AI to help improve the seller experience and help more sellers succeed," Westmoreland noted.