Companies, Ondemand Platform

Amazon building it’s own On-Demand Workforce for the last mile

Amazon recently introduced Amazon Flex, a new service where people use an app that alerts them to fetch packages, etc. from Amazon warehouses and them to customers homes in under one hour. The drivers get paid $20 an hour, which is better than minimum wage. This could be the beginning of a larger delivery strategy. Forget the drones. Forget the USPS partnership. This is probably more cost effective and can build some interesting loyalty, especially if the human touch works. Amazon wants to own the last mile.

Having a crowd-sourced delivery service enables Amazon to learn from some of it’s not-so well known ventures such as Mechanical Turk, where businesses and developers can access an on-demand scalable workforce and Amazon Services, where you can sell your own products. Both of these have taught Amazon how to deal with numerous variables involving small dollar transactions.

To be successful, there are some interesting logistical challenges for Amazon. It will have to focus on setting up mini warehouses around key cities, develop or license effective mapping software and figure out how to vent drivers. For the driver, it is important to figure out

  • what kind of insurance Amazon will or will not provide.
  • how the company will conduct background checks
  • how the company will monitor you (the driver’s behavior)

Note: In Seattle, the City Council is considering a bill that would allow for-hire drivers to unionize.

This story was first reported a while back by Geekwire, but tomorrow’s Wall Street Journal will be providing more informaiton.




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