Amazon delivery companies around the U.S. are instructing workers to bypass daily inspections intended to make sure vans are safe to drive.
Amazon requires contracted delivery drivers to inspect their vehicles at the beginning and end of their shift as a safety precaution. But some drivers say they’re pressured to ignore damage and complete the inspections as quickly as possible, so that delivery companies can avoid taking vans off the road. If delivery companies take a van off the road, they risk forfeiting valuable package routes and drivers may lose a shift.
These inconsistent inspection practices undermine the company’s public messaging around worker safety. They also highlight the tension that delivery partners face between ensuring drivers’ safety and keeping up with Amazon’s aggressive delivery quotas, which can stretch into hundreds of packages per day per driver.
CNBC spoke to 10 current and former Amazon delivery drivers in Georgia, Ohio, Indiana, Illinois, Kentucky and Texas who discovered their vans had issues ranging from jammed doors and tires with little to no tread to busted backup cameras and broken mirrors. They say managers told them to ignore these problems and complete their deliveries as usual. Some of these drivers asked to remain anonymous for fear of retribution from their employers or Amazon.
“They’d tell us, just make sure everything’s great and go,” said Chastity Cook, who quit working for an Amazon delivery company in Illinois earlier this year. “We just checked down the list. We don’t even stop to read it and make sure everything is there.”
Cook’s former employer, Courier Express One, couldn’t be reached for comment.
Amazon told CNBC in a statement that the company regularly audits delivery companies’ compliance with safety policies, including two vehicle safety checks every day. Amazon takes vehicles out of operation until safety issues are addressed, the company said.
“When safety protocol is broken, we take various actions including ending our relationship with a DSP [delivery service partner] if warranted,” the company said. “We’re actively investigating the experiences in this story and don’t believe they are representative of the more than 150,000 drivers that safely deliver packages every day.”
Amazon’s DSP program, launched in 2018, plays a critical role in the company’s vast fulfillment and logistics operations. The DSP network is made up of at least 2,000 contracted delivery firms and 115,000 drivers in the U.S., often distinguishable by blue Amazon-branded vans, that handle the last mile to shoppers’ doorsteps.
Because the DSP network is run by partners, drivers and managers operate at arm’s length from the retail giant. The working environment and management quality varies greatly between DSPs, drivers say.
Amazon has previously said it informs drivers of best safety practices and has invested hundreds of millions of dollars in safety mechanisms across the DSP network. Before stepping down as CEO, Amazon founder and executive chairman Jeff Bezos pledged to make safety and employee satisfaction a greater focus at the company.
The company has increasingly relied on software and in-vehicle technology to monitor driver safety. Amazon in February rolled out AI-enabled cameras in its delivery vans that are designed to detect safety infractions and, for years, it has used an app called Mentor to track drivers’ driving behavior. Drivers and DSPs are scored by Amazon, in part, on their adherence to safety measures, which can determine their eligibility to receive bonuses.
Delivery companies have discovered workarounds to some of these tools. Vice reported in May that some DSPs were encouraging drivers to turn off Mentor while on their route to make sure they continue to hit Amazon’s delivery targets.
Additionally, Amazon continues to face broad scrutiny around the safety and treatment of its warehouse and delivery workforce. Under the pressure of getting packages to Amazon’s 200 million-plus Prime members, drivers are increasingly speaking out about working conditions, including claims that workers routinely urinate in bottles and are pushed into dangerous situations while on the road.
How the inspections work
CNBC obtained a screen recording of the inspection process, referred to as a Driver Vehicle Inspection Checklist, showing a step-by-step breakdown of how it works.
Drivers open the Flex app and scan a barcode on their vehicle that pairs it to the app. After that, a window appears in the app, instructing drivers to start the inspection.
Drivers check their vehicle’s front side, passenger side, back side, driver side and cab. Within each category are several subsections that require further inspection, such as the van’s lights, tires, mirrors, steering, cameras and brakes.
If a driver marks issues with the van, the Flex app will immediately prompt them to contact their manager. The app also won’t show drivers their package delivery route. Once the van is repaired, whichever driver is first assigned to the vehicle must verify in the Flex app that any issues were fixed.
Otherwise, a screen at the end of the checklist will say “you didn’t report any issues with the vehicle.” Drivers are required to check a box which states, “I hereby certify that my vehicle inspection report is true and accurate.”
Damaged seat belts, broken backup cameras
In its DSP safety manuals and instructional materials, Amazon encourages drivers not to drive dangerous vehicles. An inspection guide distributed to drivers and viewed by CNBC states, in bold and red font, “Do not operate any unsafe vehicle out on route.”
A separate, 11-page safety manual for DSPs states that, “Drivers must report all vehicle deficiencies, including malfunctions and defects, immediately.” The document, which is undated, also says that pre- and post-trip inspections are necessary to “ensure your assigned vehicle is road ready and doesn’t pose any hazards that prevent the safe operation of the vehicle.”
But drivers say there are persistent safety hazards in their vehicles, from jammed doors and broken backup cameras to bald tires and seatbelts that won’t lock, and managers discourage them from reporting these issues on the checklist.
“They told us not to mark things if they were broken because then the van wouldn’t be drivable,” said Cook, the driver from Illinois. “They said to report damages to management.”
One former driver from Austin, who asked to remain anonymous out of fear of retribution from their former employer, said a manager told them that if they marked anything wrong with their vehicle, they wouldn’t have a shift that day.
The driver said they noticed numerous safety hazards while working for their DSP. Several vans had broken backup alarms, which alert pedestrians and other vehicles when the van is reversing. Check engine lights and other sensors were often flashing on the vans — enough that drivers joked it looked like Christmas lights, the driver said.
Andre Kirk, a former Amazon delivery driver in Indiana, recalled when he was inspecting his van and noticed the check engine light was on. Kirk thought it meant it was supposed to be taken out of service, but he was forced to drive it anyway.
Concerned for his safety, Kirk drove the van to a nearby Jiffy Lube. The repairman told Kirk he couldn’t work on the Mercedes-Benz sprinter vans used by some DSPs, so Kirk decided to get back on the road and complete his shift as safely as possible.
Kirk said he was confused why his DSP wouldn’t let employees report issues like he experienced during vehicle inspections.
“I felt like something wasn’t right. Why not report this?” said Kirk, who was fired from his DSP in May, in an interview. “If this is not supposed to be in service, why am I still driving it?”
Kirk’s former employer, FAE Distributors, couldn’t be reached for comment.
‘There goes your route’
After drivers flag an issue during inspections, Amazon requires DSP companies to “ground” the vehicle, or take it out of operation for repairs.
Drivers say that managers avoid grounding vehicles because they don’t want to give up delivery routes. For example, if a DSP is forced to ground three vans for repairs, they may not have enough spare vans in their fleet to handle all the delivery routes Amazon assigned them that day.
Forfeiting a delivery route can cost a DSP.
Amazon pays contracted delivery companies for every package delivered each week and for every delivery route they pick up, according to drivers and a former DSP owner, who asked to remain anonymous because they are still in the logistics business.
The former DSP owner said they tried to get vehicle issues repaired as quickly as possible, but they would tell drivers not to mark issues in the Flex app in order to avoid grounding any vans and “dropping routes.”
Dropping a route not only hurts DSPs financially, but it can also affect the score assigned to them by Amazon. Amazon ranks delivery partners on a scale of “Poor” to “Fantastic+,” factoring in things like delivery performance. If a DSP’s ranking falls, it may lose out on bonus payments or receive worse routes in the future.
“The side door could be broken, front door could be broken and you’re not supposed to report it because they’ll ground the vehicle,” said one driver from Indiana. “And then there goes your route.”
Robinhood CEO defends payment for order flow, says practice is ‘here to stay’
Vlad Tenev, co-founder and CEO of Robinhood, rings the opening bell at the Nasdaq on July 29, 2021.
Source: The Nasdaq
Robinhood CEO Vlad Tenev says he doesn’t believe that the payment for order flow (PFOF) model of market-maker routing that the company incorporates in the U.S. is under threat.
That’s despite calls from notable consumer trading advocates and regulators for a ban on the practice.
Speaking with CNBC, Tenev defended the practice of PFOF, saying that it’s “inherently here to stay.” He was referring to PFOF as it exists in the United States, where the practice is legal and regulated.
PFOF is the practice of routing trades through market-makers like Citadel Securities in return for a slice of the profits. The phenomenon has helped trading firms like Robinhood drive commissions down to zero, making it cheaper generally for consumers to invest in stocks.
“If I’m a business that’s selling things, and I’m generating transaction revenue, the more you use it, the more money you get. Inherently, there’s a conflict there because I make more money by getting you to transact more,” Tenev told CNBC in an interview.
“I think it’s important not to take the baby out with the bathwater. What does that mean, you shouldn’t make revenue on a transaction-based business? That’s unreasonable. And I think the point has been politicised to some degree.”
PFOF is viewed as controversial because of the perceived conflict of interest it creates between the broker and clients.
Critics say that brokers have an incentive to direct order flow to market makers offering PFOF arrangements over the interests of their clients.
PFOF is banned in the U.K., where Robinhood announced plans to launch Thursday.
The U.S. Securities and Exchange Commission had looked at banning PFOF in light of concerns surrounding the practice, but opted not to, while the European Union has imposed a blanket ban on PFOF.
PFOF accounts for a small chunk of Robinhood’s revenues today, Tenev said, while much of its income today comes from net interest income which is generated from cash in user balances.
Transaction-based revenues, which includes PFOF, decreased 7% in Robinhood’s second fiscal quarter to $193 million.
“If you look at equities, PFOF in particular, it’s about 5%. of our revenue, so a much smaller component of the overall pie. And we’ve diversified the business quite a bit,” including other areas like securities lending, margin, and subscriptions.
Robinhood’s race to the bottom on commission fees has forced many major players in the wealth management world to slash their own fees to zero, in turn causing some companies to wind up or sell up to competitors.
“In the U.S., Robinhood came along and really changed the industry,” Tenev said. “The discount brokers that are charging commissions essentially ceased to exist.”
“They had to drop commissions to zero. A lot of them couldn’t survive that transition as standalone companies and ended up consolidating. And we’re still living through the the end result of that.”
Federal judge blocks Montana’s TikTok ban, which would have been the first of its kind
TikTok Music has launched on Wednesday in Australia, Singapore and Mexico to a small group of users.
Jaap Arriens | Nurphoto | Getty Images
A federal judge in Montana has blocked a law that would have resulted in a state-wide ban of TikTok starting on Jan. 1, 2024.
Judge Donald Molloy explained his rationale for issuing the preliminary ruling via a legal filing released Thursday, saying the state of Montana failed to show how the original SB 419 bill would be “constitutionally permissible,” among other reasons.
The ruling represents a setback for Montana, whose Governor Greg Gianforte signed into law the SB 419 bill in May, pitching it as helping “our shared priority to protect Montanans from Chinese Communist Party surveillance.”
“Despite the State’s attempt to defend SB 419 as a consumer protection bill, the current record leaves little doubt that Montana’s legislature and Attorney General were more interested in targeting China’s ostensible role in TikTok than with protecting Montana consumers,” judge Molloy wrote in the filing. “This is especially apparent in that the same legislature enacted an entirely separate law that purports to broadly protect consumers’ digital data and privacy.”
A TikTok spokesperson said in a statement the company is “pleased the judge rejected this unconstitutional law and hundreds of thousands of Montanans can continue to express themselves, earn a living, and find community on TikTok.”
However, the office of the Montana Attorney General said in a statement that the judge’s decision is merely “a preliminary matter at this point.”
“The judge indicated several times that the analysis could change as the case proceeds and the State has the opportunity to present a full factual record,” the Montana Attorney General office said. “We look forward to presenting the complete legal argument to defend the law that protects Montanans from the Chinese Communist Party obtaining and using their data.”
Before the judge’s preliminary ruling, Montana was set to become the first U.S. state to ban the popular video and social media app, which is owned by the China-based tech giant ByteDance.
ByteDance sued Montana in May to “prevent the state of Montana from unlawfully banning TikTok,” the company said at the time. Lawyers for the company said in court filings that Montana failed to support allegations that the Chinese government “could access data about TikTok users, and that TikTok exposes minors to harmful online content.”
In March, U.S. lawmakers raised questions about the relationship between the Chinese government and the app’s parent company ByteDance when they grilled TikTok CEO Shou Zi Chew during a hearing. The lawmakers were concerned that the Chinese Communist Party may be able to access the data of U.S. citizens, and have considered implementing a nation-wide ban on TikTok.
TikTok has tried to assuage national security concerns by emphasizing its “Project Texas” initiative, intended to ensure that the data of U.S. citizens remains in the country via the help of enterprise tech giant Oracle.
Amazon broke federal labor law by calling Staten Island union organizers ‘thugs,’ interrogating workers
Amazon and consultants for the company violated federal labor law by interrogating and threatening employees regarding their union activities, and racially disparaging organizers who were seeking to unionize a Staten Island warehouse, a National Labor Relations Board judge ruled.
The NLRB said Friday that Administrative Law Judge Lauren Esposito found Amazon “committed multiple violations” of federal labor law at its largest warehouse in New York, called JFK8, between May and October 2021, a period that saw an increase in organizing activity.
In April 2022, employees voted to join the Amazon Labor Union, a grassroots group of current and former workers, becoming the first unionized Amazon facility in the U.S. Since that victory, the group has been fighting to reach a contract with Amazon.
The judge in New York heard testimony from Amazon employees, managers and labor consultants in virtual hearings that went on for almost a year. Esposito determined Amazon illegally confiscated organizing pamphlets from employees that were being distributed in on-site breakrooms and conducted surveillance of employees’ organizing activities.
Amazon also violated labor laws when it sent an employee at a neighboring facility to JFK8 home early from his shift and changed his work assignments in retaliation for supporting the union, the judge found. The employee, Daequan Smith, sorted packages at a delivery station called DYY6, down the street from JFK8.
Additionally, the judge found that Amazon broke the law when a “union avoidance” consultant, Bradley Moss, who was hired by the company, threatened employees, telling them it would be “futile” to vote to join the ALU. Amazon and other companies often hire labor consultants like Moss, referred to as “persuaders,” to dissuade workers from unionizing. The company spent $14 million on anti-union consultants in 2022, the Huffington Post reported in March, citing disclosure forms filed with the Department of Labor.
As a result of the ruling, Amazon will be required to post notices reminding workers of their rights at its JFK8 and DYY6 facilities. The company also has to make Smith “whole for any loss of earnings and other benefits,” the NLRB said.
In one exchange with a JFK8 employee, Natalie Monarrez, Moss discussed the union campaign at another Amazon facility, BHM1, in Bessemer, Alabama. Monarrez said Moss told her the Bessemer campaign was “not a serious union drive,” but a “Black Lives Matter protest about social injustice.”
“Moss then pointed to the front of the JFK8 warehouse and said, ‘Just like these guys out here, they’re just a bunch of thugs,'” Esposito wrote in her judgment, citing testimony from Monarrez.
Moss and representatives from Amazon didn’t immediately respond to a request for comment.
Employees at BHM1 voted against joining the Retail, Wholesale and Department Store Union in April 2021, but the results of the election were tossed after the NLRB found Amazon improperly interfered in the vote. A do-over election was held last year, but the results remain too close to call.
Amazon’s labor record has been scrutinized heavily, especially as union organizing ramped up in its warehouse and delivery workforce during the Covid pandemic. The company faces 240 open or settled unfair labor practice charges across 26 states, according to the NLRB, concerning a range of allegations, including its conduct around union elections.
The company has also clashed with Chris Smalls, a former Amazon employee and one of the leaders of ALU. A leaked memo obtained by Vice revealed David Zapolsky, Amazon’s general counsel, had referred to Smalls, a Black man, as “not smart or articulate,” and recommended making him “the face” of efforts to organize workers.
Amazon continues to challenge the JFK8 election results, as well as the NLRB and the union’s conduct during the drive. The agency upheld the results of the election in January.
Sports1 year ago
‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
Sports8 months ago
MLB Rank 2023: Ranking baseball’s top 100 players
Environment6 months ago
Japan and South Korea have a lot at stake in a free and open South China Sea
Sports2 years ago
Team Europe easily wins 4th straight Laver Cup
Environment9 months ago
Game-changing Lectric XPedition launched as affordable electric cargo bike
Technology2 years ago
Game consoles were once banned in China. Now Chinese developers want a slice of the $49 billion pie
Politics2 years ago
Have the last few wobbly weeks seen a turning point for Johnson as PM?
Business1 year ago
Bank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway