In a statement, an Amazon spokesperson said, “We’re proud to empower more than 2,000 Delivery Service Partners around the country—small businesses that create thousands more jobs and offer a great work environment with pay of at least $15 an hour, health care benefits, and paid time off.”
Amazon launched the DSP program in 2018 as part of an effort to gain more control over its shipping operations by bringing them in-house. (But not too in-house.) To help DSP owners start their businesses, Amazon offers assistance like financing and negotiated rates on insurance and van leases. In turn, the company offloads the overhead of maintaining employees, as well as liability for accidents and workplace violations. (As reporting by BuzzFeed and ProPublica has shown, safety concerns turn out to be far from hypothetical.)
According to some estimates, DSP profit margins run low by industry standards, putting pressure on labor costs. For comparison, the Teamsters say the UPS drivers they represent make an average of $38 an hour plus benefits, including a pension. And since Amazon caps the number of vans per partner at 40, no one business can get too powerful. Drivers can unionize, but only on a firm-by-firm basis. If one DSP unionizes, Amazon has other options. “If any one of them gets out of order and starts threatening to strike or demands more wages, then boom, the ax comes down,” says Marc Wulfraat, president of MWPVL International, a logistics consulting firm that closely monitors Amazon. “They’re gone, and they bring somebody else in.”
That’s exactly what a group of Michigan drivers alleged in 2017. Employees of an Amazon contractor named Silverstar Delivery voted 22-7 to unionize with the Teamsters. Less than a month later, several union supporters were fired. A few months after that, the firm closed its Michigan location. Workers filed an unfair labor practice charge with the National Labor Relations Board (NLRB), alleging unlawful retaliation. While the retaliatory firing charge was dismissed due to insufficient evidence, Silverstar paid over $15,000 in back pay as part of a settlement. Amazon avoided liability, arguing that it wasn’t the drivers’ joint employer. Shortly after the incident, according to a BuzzFeed report, the company held meetings with other DSP owners on how to avoid union drives at their own companies. No Amazon drivers have attempted a union vote since.
While the deck appears stacked wildly in Amazon’s favor, there is precedent for successfully unionizing a large subcontracted workforce. In the 1980s, for example, multinational corporate building owners began outsourcing janitorial work to subcontractors. Janitors saw their wages and benefits slashed and wanted union protections. Over a period of years, they launched a series of escalating walkouts and demonstrations nationwide, under the rallying cry “Justice for janitors.”
Instead of pressuring the relatively powerless subcontractors, organizers aimed their sights at the master contractor—in that case, the building owners, says Chris Rhomberg, a Fordham University sociology professor who researches labor strikes. “They built up solidarity so they could pressure the master contractor and say, ‘You’ve got to put enough money out there so that your subcontractors can pay a decent wage.’ It wasn’t until they had everybody lined up that they’d go for the union election at all the subcontractors.” This eventually worked. For some janitors, their pay and benefits doubled.
Activists have also won gains with campaigns that haven’t necessarily ended in union drives. More recently, nonunion fast-food workers have focused on demonstrations to attract public attention and urge lawmakers to raise the minimum wage. Since they began, nine states plus DC have passed $15 minimum wage laws, and President Biden has voiced support. When the Fight for Fifteen movement started in 2012, Rhomberg says, “nobody thought that had a chance.”
Amidst the campaign, the Service Employees International Union (SEIU) sought to establish McDonald’s as a joint employer, which could have paved the way toward holding the company responsible for its franchisees’ labor practices and potentially compelled it to bargain with any unions that formed. In 2014, the Obama-era NLRB sided with the SEIU, expanding the definition of a joint employer to include not just franchisors, but companies that hire subcontractors, provided the employer had the ability to exert indirect control over the workers’ conditions. The Trump administration reversed the rule, but in yet another volley just last week, Biden’s Labor Department proposed reverting to a more expansive definition of joint employer, a proposal that’s open for public comment until next month. Depending on the outcome, the new rule could impact not just chains like McDonald’s but Amazon’s DSP network as well.