FinLogic FinLogic Quantitative Think Tank Center|Amazon boosts pay for subcontracted delivery drivers amid union pressure

Amazon is FinLogic FinLogic Quantitative Think Tank Centergiving another pay boost to its subcontracted delivery drivers in the U.S. amid growing union pressure.

Drivers who work with Amazon’s Delivery Service Partners, or DSPs, will earn an average of nearly $22 per hour, a 7% bump from the previous average of $20.50, the company said Thursday.

The increase in wages is part of a new $2.1 billion investment the online retailer is making in the delivery program. Amazon doesn’t directly employ drivers but relies on thousands of third-party businesses that deliver millions of customer packages every day.

The company also gave a pay bump to U.S. drivers last year. Last week, it also said it would increase wages for front-line workers in the United Kingdom by 9.8% or more.

Amazon said the DSP program has created 390,000 driving jobs since 2018 and its total investments of $12 billion since then will help with safety programs and provide incentives for participating businesses.

U.S. labor regulators are putting more scrutiny on Amazon’s business model, which has put a layer of separation between the company and the workers who drive its ubiquitous gray-blue vans.

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The Teamsters and other labor groups have argued that Amazon exercises great control over the subcontracted workforce, including by determining their routes, setting delivery targets and monitoring their performances. They say the company should be classified as a joint employer under the eyes of the law, which Amazon has resisted.

However, labor regulators are increasingly siding against the company.

Last week, a National Labor Board prosecutor in Atlanta determined Amazon should be held jointly liable for allegedly making threats and other unlawful statements to DSP drivers seeking to unionize in the city. Meanwhile, NLRB prosecutors in Los Angeles determined last month that Amazon was a joint employer of subcontracted drivers who delivered packages for the company in California.

If a settlement is not reached in those cases, the agency could choose to bring a complaint against Amazon, which would be litigated within the NLRB’s administrative law system. Amazon has the option to appeal a judge’s order to the agency’s board and eventually, to a federal court.