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Amazon drivers begin their delivery routes as workers at an Amazon warehouse in Staten Island, New York prepare to walk off their jobs demanding stepped-up protection and pay after several workers at the facility were diagnosed with COVID-19.
Paul Hennessy | Barcroft Media | Getty Images

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.”

An Amazon.com delivery driver carries boxes into a van outside of a distribution facility on February 2, 2021 in Hawthorne, California.
Patrick T. Fallon | AFP | Getty Images

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.”

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

Read more CNBC tech news

Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

WATCH: Gemini delivering well for Google, says Check Capital’s Chris Ballard

Gemini delivering well for Google, says Check Capital's Chris Ballard

CNBC’s Jennifer Elias contributed to this report.

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Amazon sellers raise prices after Trump’s China tariff: ‘It’s unsustainable’

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Amazon sellers raise prices after Trump's China tariff: 'It's unsustainable'

An Amazon employee works to fulfill same-day orders during Cyber Monday, one of the company’s busiest days at an Amazon fulfillment center on December 2, 2024 in Orlando, Florida. 

Miguel J. Rodriguez Carrillo | Getty Images

For 10 years, Aaron Cordovez has been selling kitchen appliances on Amazon. Now he’s in a bind, because most of his products are manufactured in China.

Cordovez, co-founder of Zulay Kitchen, said his company is moving “as fast as we can” to move production to India, Mexico and other markets, where tariffs are increasing under President Donald Trump, but are mild compared with the levies imposed on goods from China. That process will likely take at least a year or two to complete, he said.

“We’re making our inventory last as long as we can,” Cordovez said in an email.

Zulay is also temporarily raising the price of some of its milk frothers, smores roasting sticks and other products. The company’s popular kitchen strainer now costs $12.99, up from $9.99 before Trump announced his sweeping tariff proposal earlier this month.

Amazon merchants are hiking prices for everything from diaper bags and refrigerator magnets to charm necklaces and other top-selling items as they confront higher import costs. E-commerce software company SmartScout tracked 930 products on Amazon that have seen increased prices since April 9, with an average jump of 29%.

The price hikes affect a range of categories, including clothing, jewelry, household items, office supplies, electronics and toys.

The trade war with China has threatened to upend sellers on Amazon’s third-party marketplace, which accounts for about 60% of the company’s online sales. Many merchants are based in China or rely on the world’s second-largest economy to source and assemble their products.

Sellers are now faced with the conundrum of raising prices or eating the extra costs associated with Trump’s new tariffs. It’s an existential threat for many sellers, who subsist on razor-thin margins and have, for the last several years, dealt with rising costs on Amazon tied to storage, fulfillment, shipping and advertising fees along with pricing pressure from increased competition.

CEO Andy Jassy told CNBC earlier this month that the company was “going to try and do everything we can” to keep prices low for shoppers, including renegotiating terms with some of its suppliers. But he acknowledged some third-party sellers will “need to pass that cost” of tariffs on to consumers.

Amazon’s stock price is down 15% so far this year, sliding along with the broader market. The company reports first-quarter earnings next week.

Watch CNBC's full interview with Amazon CEO Andy Jassy

Goods imported from China now face import duties of 145%, though Trump said Wednesday his administration is “actively” talking with China about a potential deal to lower tariffs. Chinese officials on Thursday denied that trade talks are taking place.

About 25% of the price increases observed by SmartScout were initiated by sellers based in China, said Scott Needham, the company’s CEO. Last week, stainless steel jewelry maker Ursteel hiked prices on four of its products by $6.50, while apparel brand Chouyatou raised the price of some of its dresses by $2. Both businesses are based in China’s Zhejiang province.

Anker, a Chinese electronics brand and one of Amazon’s largest sellers, has raised prices on one-fifth of its products sold in the U.S., including a portable power bank, which went up to $135 from $110, SmartScout data shows.

Representatives from Anker, Ursteel and Chouyatou didn’t respond to requests for comment.

Zulay, headquartered in Florida, is one of many U.S.-based sellers raising prices. The company is also cutting costs. Cordovez said he’s been forced to lay off 19% of his workforce and slash online ad spending by 85%.

Desert Cactus, based in Illinois, is also taking action. Joe Stefani, the company’s president, has been looking to move production of some of his brand’s college-themed merchandise out of China and into Mexico, India and Vietnam. About half of Desert Cactus’ goods come from China, while the rest are made in the U.S., Stefani said.

An Amazon worker moves a cart filled with packages at an Amazon delivery station in Alpharetta, Georgia, on Nov. 28, 2022.

Justin Sullivan | Getty Images

One of the company’s top products is a customizable license plate frame that’s manufactured in China. At the start of Trump’s first term in 2016, Stefani’s company paid import and shipping fees of 4% on the license plates. That rate has since skyrocketed to 170%, he said.

“The tariffs can’t stay this high,” Stefani said. “There’s so many people that just aren’t going to make it.”

Stefani said he expects Desert Cactus will end up raising prices on some products, though he’s worried shoppers might be put off by sticker shock.

“Will someone be willing to pay $50 for a hat on Amazon?” Stefani said. “You know it’s going to be expensive at the ballpark, but on Amazon we don’t know.”

Dave Dama, co-founder of health and beauty business Pure Daily Care, said the price to manufacture one of his skin-care products in China jumped to $25 from $10. Most Amazon sellers will have no choice but to raise prices, he said.

“If you were selling something for $40 and making a $7 or $8 profit at the end of the day, with these tariffs, those days are gone,” Dama said. “You can’t do that anymore. It’s unsustainable.”

Pure Daily Care plans to stagger price increases over several weeks, and only on products “we absolutely need to,” to keep Amazon’s algorithms from ranking it lower in search results or losing the valuable buy box, he said. The buy box determines which listing pops up first when a shopper clicks on a particular product, and the one that gets purchased when they tap “Add to Cart.”

An Amazon spokesperson said the company’s pricing policies continue to apply.

“As always, sellers set their own prices, and we regularly monitor how we highlight great prices as Featured Offers to provide customers with low prices across a wide selection,” the spokesperson said in a statement.

Dama said his company has enough inventory for some products to last up to six months, which it aims to “stretch as long as possible” in the hope that China and the U.S. can reach a trade deal. The company is also forgoing some sales promotions and discounts, while pausing spend on some display and video ads.

Regarding his inventory, Dama said, “We can try to stretch that seven, eight, nine months, which buys us a lot more time for this thing to work out, hopefully.”

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Trump tariffs are raising prices on Amazon and threatening to ruin U.S. sellers who source in China

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Pony.ai teams up with Tencent for robotaxi services on WeChat, other apps

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Pony.ai teams up with Tencent for robotaxi services on WeChat, other apps

A Pony.ai autonomous car.

Pony.ai

Chinese start-up Pony.ai said Friday it will develop autonomous driving technology in partnership with Tencent Cloud and deploy robotaxi services on tech giant Tencent’s WeChat and other applications.

The Nasdaq-listed company which specializes in autonomous vehicle technology, particularly robotaxis and robotrucks, said in a press release that the deal will include cooperation in areas such as cloud services, map data, information security and intelligent cockpit ecosystems.

The arrangement will also see the two companies integrate Pony.ai’s robotaxi ride-hailing services within Tencent’s popular WeChat app as well as other applications like Tencent Maps. 

Both companies had been in talks “for quite some time,” Pony.ai CEO James Peng told CNBC on the sidelines of the Shanghai Auto Show on Friday. He cited Tencent’s huge user base and its cloud offerings as factors supporting the “win-win” collaboration as the start-up continues to scale up.

Following the partnership, Peng said that “hopefully in the near future,” users would be able to call Pony.ai robotaxi rides straight through the WeChat app.

WeChat is known as the world’s most popular ‘super app,’ housing everything from messaging to payment transactions to food delivery services, with a monthly user base of over 1 billion people.

“Pony.ai possesses industry-leading autonomous driving technology accumulations, while Tencent excels in cloud services, mapping, and cockpit ecosystem technologies,” Vice President of Tencent Group and President of Tencent Smart Mobility Zhong Xiangping was quoted as saying in the Friday release. 

“This strategic partnership between the two parties is not only about complementing each other’s technologies and resources but also marks a new starting point for collaborative innovation,” he added. 

Ordering a robotaxi ride on WeChat may soon be possible, says Pony.ai CEO

The release said that the partnership would also see both companies collaborate on the development, testing, and operation of Robotaxis, particularly in L4-level autonomous driving.

According to SAE International, L4 is a type of autonomous driving that allows drivers to take their eyes off the road in designated areas. For comparison, L3 is considered a hands-off system, but drivers must actively monitor the vehicle and be ready to take over the wheel.

The Tencent Cloud agreement comes a day after it was reported that Pony.ai unveiled its L4, seventh-generation robotaxi solution at the Shanghai Auto Show on Wednesday. The company’s shares surged about 40% in the U.S. on Thursday. 

The start-up continues to establish itself as a prominent player in China’s autonomous driving industry. The company obtained China’s first permit to charge fares for fully driverless taxis in core parts of a business district of Shenzhen, where Tencent is headquartered. 

However, the firm may be implicated in increasing trade tensions between China and the U.S. as the latter is a market Pony.ai considers “hugely important” to its expansion plans.

James Peng, co-founder and chief executive of Pony.ai this week reportedly told the Financial Times that the company is considering a secondary listing outside the U.S. amid mounting concerns that Washington will push for the delisting of Chinese companies off the New York Stock Exchange. 

If this were to happen, it would come less than six months after the company’s initial public offering in the U.S. Notwithstanding, Peng told FT that a lot of factors need to be considered.

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