2015-06-17

Amazon App To Use Self-employed for Delivery, Disrupting UPS, FedEX



Amazon Prime Now - Now Featuring Grocery Delivery: Now available in select areas of: New York City, Miami, Baltimore, Dallas, Atlanta and Austin

Amazon Prime Now just the beginning--waiting in the wings is On My Way:
"In its ceaseless quest to speed delivery, Amazon.com Inc. wants to turn the U.S. into a nation of couriers."--Wall Street Journal
As first reported in the Wall Street Journal, Amazon is looking for a way to contain and control its shipping costs which grew 31% last year--faster than Amazon's revenue growth--threatening the very business model upon which Amazon is built. This has become a known and worrisome Achilles heel that has concerned Amazon investors. Apparently, release of the App and commencement of the service, internally called "On My Way" within Amazon, is still unknown, but it reportedly would involve using brick-and-mortar retailers in urban areas to store packages--by renting space from them or paying a per-package fee--for pick-up by Uber-like self-employed couriers to make last-mile delivery to Amazon's customers. Amazon currently utilizes UPS, USPO, and FedEX for most of its deliveries in the U.S. This would be another iteration of what is commonly called crowdsourced delivery using contract (self-employed) workers.

Principal domain name: amazon.com

AMZN stock closed UP Tuesday ($427.26  Price increase +3.59)

FedEX and UPS stock were down in after-hours trading: NYSE:UPS and NYSE:FDX

UPDATE: Caveat--California Says Uber Driver Is Employee, Not a Contractor - The New York Times: "Classifying Uber’s drivers as employees may turn out to be an even bigger roadblock to the company’s business than regulatory changes because it could change Uber’s cost structure, requiring it to offer health insurance and other benefits, as well as paying salaries. On-demand companies have been premised on the idea that people who find piecemeal work through these online marketplaces are freelancers, not employees entitled to costly benefits."

See also on Domain MondoAmazon, Apple, Facebook, Google, Winners, Losers (Scott Galloway video explaining Amazon's delivery costs problem)


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