Flex, Amazon's new on-demand delivery service, promises to get your packages to you even sooner by hiring independent drivers to bring them to your house. As a lot of reports have pointed out, Flex is basically Uber for Amazon packages.
To answer that question, we have to look at how Amazon's service may affect the most crucial part of the industry: the ebb and flow of workers.
Amazon Flex says it will pay its delivery drivers $18 to $25 per hour. They can elect to drive for two-, four-, or eight-hour shifts. In exchange, they need to supply your own car, a driver's license and an Android phone so that they can install Amazon's driver app.
The last of these requirements isn't all that different from what's expected by Uber or other driving services. But by laying out a relatively defined wage and a shift-based work schedule, Amazon is offering something more intangible: a measure of extra stability.
Compare that to ridesharing services whose drivers get to maximize their flexibility but whose income is more variable. For some, this trade-off may be worth it.
"There's nothing else out there that lets you set your own schedule or your own goals," said Uber driver Luceele Smith, who testified about the industry before a House subcommittee hearing Tuesday.
Data that Uber released in January showed that its drivers make as much as $30.35 an hour in New York City. (Other studies seem to support that figure, reporting that New York Uber drivers earn $29 an hour.) In places like this, Amazon Flex may have difficulty luring on-demand drivers away from Uber. Flex's wage offer is considerably lower than what an Uber driver might expect to make on an hourly basis, and Flex has the added requirement of working at least a two-hour shift.
But New York is something of an outlier when it comes to on-demand driver wages. Other markets such as Boston, Chicago and Washington tend to pay hourly rates in the mid-teens. In these places, Amazon's pitch to would-be drivers might sound more attractive.
Amazon's approach to the spot labor market is powerfully shaped by two other factors, according to Lawrence Mishel, a labor economist who heads the Washington-based Economic Policy Institute. First, Amazon needs to attract high-quality, trustworthy drivers because its ultimate job is to deliver packages safely to end users.
Second, Amazon Flex is betting that as the economy improves, there will still be people who are willing to work in the sharing economy rather than returning to full-time jobs.
"It'll be interesting to see, as unemployment approaches 5 percent and below, whether Amazon will be able to develop a robust workforce and what they will have to pay for it," said Mishel. "One of the issues will be, 'What are the wages people will require to get them to do this?' "
Even though the "Uber-but-for-X" business model has quickly become the subject of snark and parody on social media, highlighting how quickly and easily commoditized this industry could become, research from PricewaterhouseCoopers predicts the sharing economy will become a $335 billion business by 2025 — up from $15 billion a year today.
If that's right, then Amazon has a good shot at drawing more of the labor pool its way, particularly if Flex starts showing up everywhere it ships.
