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Amazon.com Inc. plans to start collaborating with thousands of American small businesses for package delivery, Axios reported on Tuesday.
The new move is scheduled to start by the end of the year, and Amazon confirmed to Axios that it has started recruiting small businesses in 23 states, including California, Florida, and New York.
The program mostly targets densely populated cities across the country such as New York, Los Angeles, and Boston, and Amazon is intending to work with businesses such as florists, clothing shops, and coffee shops for delivery of its packages.
The company is trying to expand its “last mile” network, the stage where packages are delivered to a customer, using external workforce.
Participating businesses is estimated to deliver 30 packages per day, seven days per week, and it is needed to have a secure storage area.
An average rate paid to the small-business owners could be $2.50 per package, even though Amazon did not state exactly the rate. It also depends on the geography and on the number of businesses that sign up.
The concept first appeared in India in 2015. It has also been launched in Japan and Spain, and a pilot program was launched in rural America in 2020, Axios reported.
Amazon is expecting to partner with 4,500 small-business drivers by the end of the year.
Beryl Tomay, vice president of Amazon Last Mile Delivery and Technology, said to Axios in that the new program will help “create opportunities for delivery partners interested in growing a business … and supplementing their income.”
Amazon is trying to expand its delivery amid growing competition for drivers, rising costs, and criticism it is treating its drivers “like robots.”
For already partnering drivers, Amazon has software that dictates how many packages a driver should deliver during his shift, a number that can slowly increase, according to Bloomberg.
It also uses video cameras, telematic devices, and smartphone applications to monitor drivers.
Critics said that Amazon’s algorithm can put demerits on drivers because it does not function properly, and this lowers the amount Amazon pays them.
“We were treated like robots. They’re so data-driven they don’t know how to treat people with dignity and respect,” said Ted Johnson in an interview with Bloomberg.
Most of the 15 delivery partners interviewed by Bloomberg said that the delivery expectations were unrealistic, there was buggy software, and their concerns received a dismissive attitude.
A delivery company owner introduced to Bloomberg by Amazon said the software mistakes were negligible.
Legal Action Against Amazon: Prime
On June 21, the Federal Trade Commission (FTC) took legal action against Amazon for allegedly enrolling customers in its Prime program without their consent and then devising an elaborate scheme to prevent them from unsubscribing.
“Amazon used manipulative, coercive, or deceptive user-interface designs known as ‘dark patterns’ to trick consumers into enrolling in automatically renewing Prime subscriptions,” the agency said in a statement.
The FTC accused Amazon of “cancellation trickery” and knowingly failing to address non-consensual subscriptions to the Prime service, which comes at a monthly charge of $14.99.
In the first quarter of 2023, Prime accounted for some $9.6 billion in Amazon earnings.
An Amazon spokesperson told The Epoch Times in an emailed statement that the FTC’s allegations are “false” and that its process for joining or leaving Prime is “clear and simple.”
“Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” FTC chair Lina M. Khan said in a statement.
The agency also accused Amazon of slow-rolling the process of handing over information requested by investigators.
An Amazon spokesperson disputed the allegations.
According to another FTC press release, Amazon’s Ring doorbell company was charged with compromising its customers’ privacy by allowing employees and third-party contractors, including some based in Ukraine, to access consumers’ private videos, and use the videos to train algorithms without their consent.
In one such example of violations of users’ privacy, one company employee allegedly watched thousands of video recordings belonging to one female customer who had purchased Ring cameras and placed them in “intimate” places across her home, including in her bedroom and bathroom.
“The employee wasn’t stopped until another employee discovered the misconduct,” the FTC said. “Even after Ring imposed restrictions on who could access customers’ videos, the company wasn’t able to determine how many other employees inappropriately accessed private videos because Ring failed to implement basic measures to monitor and detect employees’ video access.”
The lack of basic privacy and security protections in the Ring doorbell also allowed hackers to take control of consumers’ accounts, cameras, and videos, the FTC said, including the accounts of approximately 55,000 U.S. customers, some of whom were subsequently threatened, harassed, and insulted by the hackers, the agency said.
Ring LLC, which was purchased by Amazon in 2018, has agreed to pay $5.8 million to settle the claims.
The FTC recently fined Amazon for another violation, this time in consumers’ privacy with its smart speaker Alexa.
The FTC alleged that Amazon engaged in unfair, deceptive practices by telling consumers that Alexa was private, and it allowed users to exercise control over how sensitive information was collected and retained. In reality, Alexa failed to delete children’s personal information and audio recordings.
Other unfair privacy practices included insulating geolocation data from consumer deletion requests. Amazon Alexa also continued to use data for product improvement purposes even when the user requested the information be deleted.
As a result of the lawsuit, Amazon settled for $25 million.
In a June 4 blog post, Amazon customer Brandon Jackson described his week-long ordeal of being locked out of the Amazon account he used to control many of the devices around his home.
Jackson, a Maryland man, was locked out of his Amazon smart home system after a delivery driver reported hearing a racial slur while dropping off a package.
Jackson determined that his Eufy automated doorbell had addressed the delivery driver with an automated message: “Excuse me, can I help you?”
“The driver, who was walking away and wearing headphones, must have misinterpreted the message,” Jackson wrote.
Jackson said he promptly shared his video evidence with Amazon, but his account remained locked for a week.
“I fully support Amazon taking measures to ensure the safety of their drivers. However, I question why my entire smart home system had to be rendered unusable during their internal investigation,” he wrote.
Anne Johnson, Tom Ozimek, Katabella Roberts, and Ryan Morgan contributed to this report.