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Amazon to Fund Raises for Delivery Drivers Amid Tight Labor Market

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Amazon will fund wage increases for its North American drivers in its Delivery Service Partners program as soon as this week.



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CAITLIN O’HARA/REUTERS

Amazon.


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com Inc. said it is planning to raise pay and benefits for its delivery partners, as the e-commerce giant gears up for the peak holiday season amid a persistently tight labor market.

The company will invest $450 million to fund wage increases and other benefits for delivery drivers employed by members of its Delivery Service Partners network, it said in a release. The company started the program in 2018, encouraging entrepreneurs to start their own fleets of drivers with initial investments of as little as $10,000.

Other benefits as part of the new initiative include up to $5,250 a year for drivers to pay for educational programs, and financial support for a 401(k) investment plan for drivers.

The announcement comes as Amazon starts hiring for the all-important holiday season, when orders for deliveries hit monthslong highs. It also comes as Amazon has been restructuring the logistics network after it grew too quickly during the pandemic, leading executives to slash planned warehouse capacity to cut costs.

Amazon in recent years has rolled out similar benefits for its warehouse workers as it expanded the logistics network, which is the backbone of its vast e-commerce operation, while trying to fend off union organizers who have started to make inroads in its workforce.

Amazon has invested more than $7 billion in its Delivery Service Partners network since 2018, the company said. While it also uses outside delivery companies, it has increasingly relied on the network to help ship packages in the last miles of transport to a customer’s home.

Write to Dana Mattioli at [email protected]

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