After four and a half years Amazon has decided to say goodbye to Amazon Flex in Spain, since according to the retail giant its “business is warehouse management, not the last mile”. in Spain during his visit to BCN1, its largest logistics center in the country, “Right now you can find a web page that talks about ‘Flex’, but we confirm that today the service accounts for 0% of our shipments”, and ensure that others are being launched “programs to find solutions” for urban delivery.
But Spain has not been the only country to stop operating through autonomous distributors, since the company has also deactivated Amazon Flex in Germany, its second largest market after the United States. “We regularly evaluate our various programs and We have made the difficult decision to discontinue the Amazon Flex program in Germany at this time.”
The end of Amazon Flex and the creation of a more formal delivery network
Although the company has not revealed the reasons that led it to stop the service, it is believed that it is due to the fact that in recent years has built a more formal delivery network which is supported by small startups that are indebted to Amazon and have called Delivery Service Partners (DSPs).
Furthermore, we cannot ignore the fact that the end of Flex occurs at the same time that two legal initiatives arrive that have given much to talk about in Europe: in Spain, which seeks to regulate labor between platforms and delivery men, and in parallel, the European Commission prepares its own standard, should be ready in the coming months, which seeks to give a voice to more than five million freelancers.
According to expert logistics consultant There is another very important reason behind this decision: “the change of economic cycle that is suffered worldwide, having chained in two years a pandemic, the semiconductor crisis, the lack of raw materials or the recent invasion of Ukraine by Russia”
The change in the economic cycle slows down the growth of economies, impacting Amazon’s business figures, “which has recently entered into losses and is renting out part of its logistics network in the United States, for example”
The controversy behind self-employed delivery men
Amazon Flex arrived in Europe in 2017, landing almost at the same time in Germany and Spain, giving people the opportunity to work autonomously as parcel and shipment deliverers using their own vehicles. Although it is a very tempting job, since it offers to generate extra income by choosing your own work hours, produced great discontent on the part of the transport sector for employing unlicensed persons as drivers.
Added to this, Amazon was accused of exploiting its drivers, by promising a salary of 14 euros an hour, with many inconveniences to obtain it. For example, the trip to the logistics center and the trip back after making the last delivery are not included in working hours, working hours are based on estimates, making it very difficult to arrive at full hourly pay, and drivers had to cover maintenance of the car and gasoline.
For the year 2019, the UGT denounced that the Amazon Flex program was a very dangerous business model that lowered the working conditions of its workers by not contributing any money to Social Security.
At that time, the UGT was able to access the data of the delivery people who were registered ex officio by the Work inspection. In the provinces of Madrid and Barcelona alone, nearly 4,000 people were counted, which represented almost six million euros in the cost of unpaid contributions to the General Social Security Scheme.
The DSP solution: outsource the service
As compensation for the end of Amazon Flex in both Germany and Spain, the company invites drivers to join one of hundreds of local DSPs (delivery service partners), Amazon’s latest business bet
DSPs offer people to start a small parcel delivery business, with an initial investment of 30,000 euros and looking for their own couriers. According to the promises of Amazon, a company that has between 20 and 4o vans, could have potential income of 1 or 2 million euros and net earnings of 100,000 euros per year.
The DSP program has already been operating in the United States since 2018, where Amazon gives delivery companies vans with its logo, uniforms and gas discounts in exchange for exclusivity. Despite the attractiveness of the exhausting work rate to which they have been subjected, since they must deliver up to 370 packages each shift without the ability to take breaks to eat or drink. So it will be a matter of time to find out if this initiative takes off in Spain or what the solution will be to improve last-mile deliveries of the great marketplace in the country.
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