Uber & Amazon Flex in California; the Land of Milk, Honey and the Working Poor

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.

Flex?

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.

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

And insurance?

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.

Some thoughts.

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.

5- Uber may think of this as gamefication and psychology. This fellow thinks of it as a very heavy ball and chain and necessary action for brute survival. Hmm it all depends on your point of view.

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?

Please consider leaving a comment as your input will help me (& everyone else) better understand and learn about local.
Uber & Amazon Flex in California; the Land of Milk, Honey and the Working Poor by

14 thoughts on “Uber & Amazon Flex in California; the Land of Milk, Honey and the Working Poor”

  1. When I first discovered Uber several years ago I thought it was amazing! I travel a lot and am not a fan of the “taxi” experience. Uber was cheaper and the experience was much better – nicer cars, nice drivers, no worries about cash or tipping. Give the taxi industry some competition so they improve.

    But I didn’t see what this would turn in to. I’ve watched Uber squeeze their drivers harder and harder and now it’s turned into an awful situation for them. It’s a very sad situation, and I’ll have to reconsider my choices going forward.

    Thanks for posting this Mike.

    1. @don
      Remember how the first drive said: Lift, Uber they are all the same.

      That is the point. they are all the same… uber, left, amazon. And without organization and appropriate policies any and all companies HAVE to treat their workers this way or they will be at a competitive disadvantage to those that are (usually… there are some exceptions like Costco).

      The lesson here, isn’t that Uber (or Lyft or Amazon are “bad”). Its that as a society WE set the rules, and we need to do that now more than ever and not site back and let (fill in the blank…) Uber or Amazon set those rules.

  2. Mike,

    Thanks for posting… I never knew about Amazon Flex. I will add a reference to your blog in my article on why I feel Amazon is still failing in certain industry channels (and you know the one I am referring too).

  3. This story is all too real. My car has been out of commission for a couple days so I’ve been taking a bunch of Lyft rides to get around. All of my drivers were great, but it’s clear that they were all too focused on survival to make any plans for their futures.

    The Bay Area has become so expensive that it’s rare to see anyone who works just one job, just full time. It’s also no surprise that support for UBI is gaining steam around here, because otherwise when automation hits, it’s going to hit hard. I fully expect crime and poverty to go through the roof if nothing gives.

    In the short term, I just hope they fix the tax rates for independent contractors.

  4. Mike: Great story.

    I’ve been witnessing this for the last 15 years or so. Before that via some of our smb’s I was aware of it. I just didn’t see it first hand. Actually my grandparents were immigrants who didn’t speak the language when they came to the US, landed in the country with many relatives, many of them who I knew growing up…and I heard similar stories from them.

    In general I think it is an issue that has plagued this nation and many nations over the millennia. There are people in the underbelly of the economic environment. They struggle. Their struggles are epic to just make it. There are a few nations that do better overall, but realistically there never have been many.

    Just to say it isn’t just Uber and Amazon and current policies. There is more to it.

    But very enriching story. Thanks.

  5. Wow, this is really enlightening and thought provoking. I wasn’t even aware Amazon did this. I did realize the issues w/ Uber…and that most people that are working there don’t factor in the costs for gas and wear & tear. It really is way less profitable that it appears to be.

    You’re right that some of these people are stuck as they are working more hours to make up the difference. And, the return on this is so marginal that it’s hard to make it by.

  6. I use Uber a lot – mostly in South and Central America where it is ridiculously cheap. We are talking $2 to $4 for a very long ride. Yes, things are cheaper but gas is the same price and so are cars, parts and repairs (maybe less depending who you go to.). After paying gas and maintenance, I have no idea how they make a penny. I’ll continue to use them but I am not sure how much longer this can last. At some point, they will run out of drivers to exploit but maybe that’s where self-driving cars come in. Then again, the roads down here are not conducive to that at all.

  7. I had heard of the recent news of Walmart testing out this concept of employees acting as delivery drivers, but wasn’t aware of Amazon doing this either.

    It’s going to be really fascinating to see how this all plays out as it’s happening in front of our eyes already. A lot of my non tech friends don’t understand how close we are to this.

    Hopefully it’s not all doom and gloom and society can find a balance with the changing order.

  8. This is an important piece, Mike. I’m glad the man you interviewed was able to find 2 bedroom apartment for $950 in the SF Bay area. $2950+ would be more normal for something like that anywhere close to the city, but I guess things are still close to affordable as far away as Fresno. His commute is unreal.

    I can answer unequivocally, no, the exploitation of workers (including my own nieces and nephews who are trying to provide for themselves with jobs like these) is not the future I would want for my state or my country. The only thing I know how to do is to use my own dollars to support businesses which support their employees, as often as I can, but the choices continue to become fewer as the big fish eat up the little fish.

    Thank you for writing this. You’ve chronicled something very real, very well.

  9. The free market is working fine, this dude just isn’t getting the hint. He’s incurring massive amounts of personal expenses just so he can drive Uber and Amazon and not seeing the bigger picture.

    I refuse to believe that working even a low-paying job in Fresno and eliminating a 3-hour commute would not be the better strategy both for his personal finances and sanity.

    https://fresno.craigslist.org/search/jjj

    Well over 20 full-time jobs were posted *today* in Fresno. A $500 car payment could be eliminated along with 6 wasted hours of driving probably saving him $2,000 or more per month after gases, taxes, insurance, ect.

  10. I feel for the guy and would have ‘charity’ tipped as well. Youre a good man mike.

    I have also called bullshit on the ‘sharing economy’ Silicon valley circlejerk horseshit for years. Its all spin driven by the oligarchy to placate the masses and give them hope that theyre not completely f*cked.

    But he has a baby on the way??!! Really??!!

    I think our societal issues go way deeper than dire employment future prospects if this guy is -IMO – ignorant enough to bring another member into his family under his current circumstances.

  11. From several years ago a list of the largest employers in the US: https://www.usatoday.com/story/money/business/2013/08/22/ten-largest-employers/2680249/

    A couple of hi tech companies there but most are retailers and UPS. UPS pays good salaries for roughly the same thing Amazon is doing in your story.

    Lots of people working retail and getting paid low salaries. Walmart the largest private employer in the nation is also well known for having employees who still get government assistance. Their salaries are not adequate for a living wage.

    I suspect this isn’t overwhelmingly different than at other times in the past. The majority of working people in the US (and in other nations) don’t have great skills that translate to high incomes. Those large employers above don’t quite equate to the situations at Uber, Lyft, and Amazon deliveries….which are tough ways to earn a living.

    When Uber took off a few years ago many of its initial drivers found that it led to good income, but that situation changed dramatically and quickly as Uber management changed their status and ability to earn money.

    I’ve become aware of these struggling people in our economy. Have seen them up close for over 15 years. In many cases their skill levels and education are less than what equates to better incomes. There are many who work 2 or 3 jobs, or 2 or more jobs PLUS school. The reason one only runs into them sporadically, such as Mike’s story above, is that they are too busy to be seen in the media. They are struggling to make ends meet.

    The reason there was a massive labor movement in the US a century plus ago is that there were millions of workers then similarly struggling with low incomes.

    When you see and experience this part of the population its not a comfortable sight.

    I have no great solutions or answers even as I’ve witnessed this phenomena for years. Our politics don’t lend themselves to dealing with this issue.

  12. Have you ever heard of Adam Curtis?

    You might like some of his documentaries. Any of the following 4 are somewhat related to the topics you touched on in this blog post.

    The Century of the Self
    The Trap: What Happened to our Dream of Freedom
    All Watched Over By Machines of Loving Grace
    HyperNormalisation

    There’s also a book coming out by the author David Graeber on the topic of bullshit jobs. He also wrote the book Debt: the first 5,000 years.

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