Amazon takes a page from Uber, starts hiring part-time delivery drivers

• "Make $18–25/hr delivering packages for Amazon with your car and smartphone. Be your own boss: deliver when you want, as much as you want," reads the pitch for Amazon's (AMZN +0.2%) Flex part-time delivery driver network. Flex has launched in Seattle, and will be available "soon" in NYC, Chicago, Dallas, and several other cities.
• For now, Flex is limited to Amazon's Prime Now rapid delivery service (orders delivered in 1 or 2 hours), but could expand to other packages in the future. Drivers need to be at least 21 years old, have an Android phone, and pass a background check. They can "choose any available 2, 4, and 8 hour blocks of time to work the same day, or set availability for up to 12 hours per day for the future."
• Assuming it's able to hire enough drivers, Flex gives Amazon a low-cost way to expand its rapid/same-day delivery footprint, and represents a challenge to ride-sharing giant UBER, which has been hungry to expand into delivery/logistics services. Both Uber and Amazon (the latter via Prime Now) have launched food delivery services.

Comments

[Jack Ready]

"1 month. This stock is not worth 100 dollars. Market is now coming up to speed. Started shorting at peak 550"

Will keep an eye out for Oct 30.

Not working your way so far but plenty of action packed days to go.

[Jack Ready]

"Shorts are going to kill this stock back to stone age. Opened big short position. Target 400."

Some professional analysts forecasting between $600 and $700.

This will be a rousing bull fight to watch between you and them.

Got a target date in mind?

[saminny]

1 month. This stock is not worth 100 dollars. Market is now coming up to speed. Started shorting at peak 550

[saminny]

Down 10% in 5 days, 1% already in pre-market. This sucker is falling down fast. Shorts are going to kill this stock back to stone age. Opened big short position. Target 400.

[C. Brennan]

In my experience the main "value add" for businesses these days is Service with a capital S. If you can get a product to a customer better or make the product better (tailored for a customer specifically), the business will be in demand. Save the customer either time or money or both. Now it's all on a very personal level, with everyday needs, to make a busy life run smoother.
Whoever does this best will win. Amazon has the experience and resources to do it. I'd buy a bunch more if I had the funds.

[gensearch2]

Cost only makes a difference, if you think "profit" has meaning in the Amazon model.

[User 40040506]

I have a very strong hunch that from now on Amazon changed its "Amazon model" to profitable. I have been quite negative on Amazon because of its profligate spending. However, there are strong indications now that it is bringing its house in order.

[User 40040506]

Eric:
We cannot "assume" that Flex "gives Amazon a low-cost way to expand its rapid/same-day delivery footprint". We have no factual knowledge of Amazon in-house or contractor delivery costs.
Also, who is paying for gas and extra insurance? If Amazon does not, then there will be no high quality drivers.

[Eric Jhonsa]

It's "low-cost" in that there aren't major up-front investments involved. Don't have to buy delivery cars/trucks or commit to a salaried workforce. Labor costs scale up and down based on need.

Uber drivers pay for gas, I suspect Amazon will go for a similar arrangement.

[User 40040506]

Yes, that is true as far as capital investment is concerned.
But in the end what really counts is the cost of delivering each package and Amazon pays USPS something like $1.80 to 2.00 per package and USPS is losing money on each one of them (it takes more than twice that amount to deliver the package by UPS and FedEx).
So, I do not think that there is any significant potential for Amazon to decrease the cost below USPS.
However, if the customer pitches in with extra money for speedy delivery, then this scheme might just (marginally) work.
See this for costs for Amazon from UPS/FedEx/USPS:
http://tinyurl.com/om3...

[User 40040506]

I do not think Amazon delivery costs can be brought down to below UPS/FedEx/USPS. After all, USPS is government subsidized and it charges the lowest with "Smart Post".
BUT, this UBER thing may be a sound strategy to keep UPS/FedEx/USPS rates as low as possible.
As far as "drones, self driving cars, and other automated delivery mechanisms" - this is not going to happen in the next 10 years, so there is no reason talking about it.

[ReligiousWacko]

watch the lawsuits pile up eventually http://tinyurl.com/nho...

[Anyoption]

Just in California, where big government reigns supreme.

[Gayle Gregory Goodman]

Start shorting Fedex and UPS as Amazon paying Zero Benefits and lower pay. This will hurt the whole economy as Delivery drivers with good paying wages and benefits will soon become an extinct dinosaur. Short UPS

[StrattonOakmont]

is UPS no longer paying it's drivers as independent contractors?

[Kirk Broadhurst]

This is just a stop gap until drones, self driving cars, and other automated delivery mechanisms take over.

[C. Brennan]

I think you're right about that. New careers as drone repairman?