I was feeling lazy and running a little late so rather than grabbing BART in San Francisco I grabbed an Uber to the airport today. As I typically do, I asked the driver how Uber was treating him given the recent firing of his boss… He grumbled and said they sucked and it was getting worse.
At first I thought it was just the standard line but he then said: “Amazon wasn’t too bad these days”.
Oh you work at Amazon?
Yes I am an Amazon Flex driver.
I am a contract worker for Amazon deliveries.
Oh. Amazon’s same day grocery service? Or their same day delivery service?
No, no regular packages coming into one of their warehouses. They have four warehouses in the area. These are just Prime, 2 day deliveries.1
Does Amazon cover any of your expenses (Stupid question really but inquiring minds want to know)?2
Hah, no but neither does Uber.
How well do they pay you?
I sign up for 4 hour shifts and get $80. Sometimes, like on Pride Day, when there is a ton of traffic and no one wants to work I can get $120. Sometimes I can only get a 3 hour shift for $60. It’s not bad. I finished the run early and started on Uber. If another Amazon time block is available I might grab it. It depends on the deliveries for the day.
How many packages did you deliver today?
Around 30 today. Yesterday I had almost 70 but still was able to finish a little early3. I had to take the Amazon job. I was working Uber and used to make $2000 a week but now, even with Amazon its down to about a $1000 a week. Uber keeps cutting us back. And if the new San Francisco rules go into affect it will be even worse.
Oh you get paid for four hours even if you get done early? And then you pick up some Uber hours before you go home? Where do you live?
Yes.. as soon as I get them delivered I can sign off4. I live in Fresno.
How far is Fresno from San Francisco?
Its about 2 and half, three hours depending on traffic.
You commute that far?
No, no. I sleep in my car.
Sleep in your car? Every night?
3 or 4 nights straight in a week before I go home.
Wow. Where do you find a safe place to sleep?
Oh, I have my spots. I really like Palo Alto, it’s really safe there. A lot of Uber drivers sleep in their cars. I’m not the only one. Not by a long shot.
And tonight, it’s Thursday, you heading home?
Nah, I’m driving Uber till 2, 3 or maybe 4 in the morning.
Why so late? You need the income?
I need the bonus.
If I get 41 more rides between now and end of day I can make my bonus5. It will be enough to pay for my gas.
But it almost 2 in the afternoon, will you make it? That’s 41 rides in 10-12 hours. That seems like a lot of rides.
It is. I hoped to get another Amazon shift but one hasn’t popped up. I don’t know if I will make the 41 trips but I have to get the gas money. The Uber day ends at 4:00 am tomorrow so I will keep at it as long as I can.
It really stresses me out. And that really stresses my wife out. She’s pregnant and I gotta do something.
You can’t find work in Fresno?
Nothing has turned up but this can’t go on. My wife is working part-time but soon she’ll have to quit.
What did you do “before”?
I was a manager at a chain restaurant. My boss asked me to take on a second location with no extra pay and I couldn’t do it… it would have meant another 4 or 5 hours a day and no raise. I had to quit.
My wife and I are looking for a place. We have two kids and our third is on the way and we have a 2 bedroom apartment for only $950 a month. California is too expensive and it’s killing me. But we had to move down there to get a rent we could afford.
We don’t have family nearby. I’m worried that I could be up here when my wife goes into labor.
Have you thought about moving out of state to someplace less expensive?
Can’t. Not for a long time. My wife’s children are from her previous marriage, there are custody issues and her husband is a real….
You car looks new. What is that costing you?
About $500 a month. Gas another $1400. Almost $2K a month right there. 6
Insurance is another $250 a month, and repairs last month were a $1000. They usually run less but I needed brake work. Have to take it back, they are making noises again. Dam mechanic.
We arrived at the airport. I tipped him7 and we said good bye.
1 – Amazon Flex zipped by me and I hadn’t realized that Amazon was staking out the last mile of their logistics network. Using piece workers and flexible scheduling they have created a real world Mechanical Turk and managed to reduce their delivery costs for the last mile. Apparently the program has been rolling out over the past 8 months. And is starting to get Uber-like driver complaints as well.
2- I didn’t think that Amazon would pay any expenses but I thought I would ask. No capital requirements needed, no pesky health insurance, no vacation pay… just some unemployed workers with a car that they can fit boxes in and can sleep in. The reserve pool of labor comes in handy.
3- Even though Amazon books a driver for 4 hours, they really are just concerned about managing costs, controlling the per package costs and removing any profit from the delivery. Depending on the situation it ranged from a high of $2.50 per package to as little as just over $1. It seems like it will be hard for UPS to compete with this cost and exploitation structure. While I doubt that UPS drivers will want to use their own cars for delivery, Walmart is doing a pilot where employees are doing deliveries on the way home. Hmm.
4- Once Amazon figures out that folks are finishing early there will be the temptation to pull an Uber on them and start pulling back on the pay rate. Or the hours. Or both.
6-You have to love headlines like this: How You Can Earn $18 to $25 an Hour With Amazon Flex. Ooops… neglected a few expenses in my calculation… Oh did I mention that you have to pay 15% of the gross for FICA? $80 becomes $68 at tax time and once you subtract the car costs you are once again barely over minimum with Amazon. And remember he likes it more than Uber.
7- I tipped not because he had done a great job. Although he had. But as an act of charity. Charity? How does that help. In fact in aggregate it only will make matters worse. Ultimately its up to Amazon, Uber and the government to establish a wage that doesn’t drive these souls into the working poor house. Tipping ends up just being another cost that Uber can externalize. It doesn’t solve the core issues.
Sharing economy my ass. This guy was smart and hard working. He managed to work himself right into a corner. I am not sure that he and his are going to find their way out.
But spin this story but a short distance into the future and it becomes very dystopian indeed. Not only do you see the collapse of retailers and malls and a complete rearrangement of the building landscape, you see more national companies (think Amazon/Whole Foods, Uber and who knows who else) achieving scale at a local level using these techniques. Local stalwarts like UPS, FedEx would be swept up (off?) in the change. These business models will be driving whole new waves of change, disruption and likely more drastic outcomes than we are seeing now.
Companies like Uber and Amazon don’t see themselves as cab company or as a book seller. They see themselves as marketplaces and logistic companies. There is no need to profit from the widget or service itself that they are providing but from the delivery of the transaction or the transportation of the product itself. They want a slice of all business and are thus motivated to drive the actual pricing as low as possible to attract consumers .
In this scenario contract workers are but a temporary inconvenience pending the arrival of more automated, less troublesome solutions for the last mile. And every business service or product that is provided in the local market at scale is a target for their involvement.
But the future isn’t linear. These first and second order levels of change don’t necessarily need to be negative. We watched over the past 70 years as we let our shared spaces and workers (i.e. us) be controlled by market forces. The outcome was suburban sprawl of the worst order, traffic jams, smog and global warming and many low skilled workers on the edge of desperation.
If we can see this new, radical outcome heading our way we can make choices and implement policies that leave the members of our society whole and the landscape in which we live habitable.
To some extent this dystopia is very real NOW in San Francisco. The question for all of us is, is this the future that we want and if not, how can we create a future that we do want?Uber & Amazon Flex in California; the Land of Milk, Honey and the Working Poor by Mike Blumenthal