New Jersey Attorney General Jennifer Davenport is suing Amazon over its Delivery Service Partner program, arguing it is a monopsonist that sets pay and conditions for drivers it classifies as independent, while preventing them from unionizing and barring contractors from hiring one another’s drivers.
monopsonist (noun): one who is a single buyer for a product or service of many sellers
(Don’t be embarrassed. I didn’t know what that word meant either.)
The complaint alleges Amazon gives drivers uniforms, branded vans, and routes, monitors them with cameras and AI, flew drones over workers organizing a strike, and steers contractor hiring, with union supporters at one delivery station later turned down or fired by other contractors. It’s funny to use the word “alleges” in this context, because I remember covering almost all those practices in this newsletter.
Davenport goes on to say that Amazon’s “dominant buyer power” leads to “lower wages and worse working conditions” for “everyday workers in New Jersey — and likely across the country — who provide the delivery services Amazon demands.” She also notes that DSP drivers earn significantly less than those working for USPS, FedEx, or UPS.
In other words… Amazon calls these drivers “independent contractors,” but manages them like they’re employees, and that breaks a lot of labor laws. The allegations themselves are not groundbreaking, as folks have been making them against Amazon for years. However, this is the first time that a U.S. state has filed a monopsony conduct complaint.
Amazon of course denies the allegations. Company spokesperson Steve Kelly told Engadget:
“This complaint is not grounded in fact. The Attorney General’s characterization of the DSP Program and the claims about working conditions are just wrong. The truth is, DSPs are independent business owners who make their own decisions about hiring, fleet management, and capacity planning — and they choose whether to work with other companies besides Amazon.”
He then went on to blast the Attorney General’s office for choosing “a press conference over a conversation or real effort to understand the truth.”
I’m going to eagerly follow this case, and I look forward to reading the e-mails and documents that are made public in discovery. The outcome of the lawsuit could set off a chain of events, including similar state lawsuits, that eventually lead to a fundamental change in how Amazon runs its delivery network.
