Amazon Trap Delivery Contractor Exit Fee Concern: Report
- A veteran who started an Amazon delivery business told Protocol he wants to shut it down.
- He said he was afraid of the possible exit fees he might owe Amazon if he terminated his contract.
- He told Protocol that Amazon charges for damage to pickup trucks and damages can reach over $100,000.
A veteran who started an independent business delivering packages for Amazon told Protocol he wanted to shut down his business but was too scared of Amazon’s early exit fees.
Amazon’s extensive delivery network is partly made up of delivery service partners, contracted third-party companies that deliver the tech giant’s packages to customers.
The veteran, as well as other DSP owners who spoke to Protocol, said they currently rely on loans from the Federal Paycheck Protection Program to support their income, or they used to.
The veteran told Protocol that he wanted to close his business, but was too afraid of the exit fees he might incur.
“They make it extremely difficult for you to get out of the program,” he said. “If I said, ‘Hey, I can’t do this anymore. They note every nick or scratch on a vehicle; the average person trying to return the vehicle, you see well over $100,000 in damage they’re going to find in your fleet.”
Amazon did not immediately comment when contacted by Insider about Protocol’s report.
Amazon offers DSP owners a “flexible lease” option that allows them to lease Amazon-branded pickup trucks from an unnamed “third-party fleet management company.”
The veteran first created his DSP after seeing an ad that specifically encouraged veterans to apply by saying that the usual requirement for applicants to have $10,000 in start-up money could be waived for veterans, a- he told Protocol.
The protocol granted the veteran and other DSP owners anonymity, as they feared Amazon was taking revenge against them.
Vice also released a report on Monday about Amazon DSPs shutting down their businesses.
A DSP owner told Vice that she closed her business in October 2021 because she was going into debt and showed the publication an invoice for $64,465 for damage to 20 pickup trucks.
DSP owners have previously clashed with Amazon over how much control it has over them and their drivers.
A woman who started a DSP filed a lawsuit against Amazon in January, claiming the tech giant slashed profit margins with its performance standards.
That lawsuit said that Amazon charges DSPs for vehicles returned through its pickup truck rental contractor when a DSP contract is terminated, and that the DSP was charged “$19,000 in exit fees each for several vans.
CNN reported in September 2021 that two DSPs were threatening to sue Amazon over the working conditions of their drivers. Following the legal threat, Amazon terminated its contracts with them. DSPs then filed a lawsuit against Amazon in October, claiming it made “unreasonable” demands of their drivers, Bloomberg reported.