Thursday, June 28, 2018
All the issues we have seen emerging from employee classification—or misclassification—were likely to come to a head in the context of a large multistate employer. And Amazon is the perfect catalyst. When Amazon “entrepreneurs” hit someone in an Amazon van—that we will be told really isn’t an Amazon van—and it will assuredly happen, the driver will be hurt, or worse, and so, somewhere (many such somewheres) will a third-party. This is not speculative, it is reasonably foreseeable. So, the question that I pose to every first-year law student at the University of Wyoming College of Law springs to the fore: who is going to pay? Because somebody is going to pay (even if we return de facto to the 19th century and that somebody is the victim). Much of what will play out is excruciatingly predictable.
Amazon had already “Uberized” its “last mile” delivery services through a “platform” structure known as “Amazon Flex.” Now Amazon has announced a new “Delivery Service Partners” program, described as the company’s attempt to build its own delivery alternative to USPS, FedEx, the U.S. Postal Service and other traditional shipping companies.
“The new program lets anyone run their own package delivery fleet of up to 40 vehicles with up to 100 employees. Amazon works with the entrepreneurs — referred to as ‘Delivery Service Partners’ — and pays them to deliver packages while providing discounts on vehicles, uniforms, fuel, insurance, and more. They operate their own businesses and hire their own employees, though Amazon requires them to offer healthcare, paid time off, and competitive wages. Amazon said entrepreneurs can get started with as low as $10,000 and earn up to $300,000 annually in profit.”
According to reports, Amazon “now has 7,000 truck trailers and 40 jumbo jets that shuttle packages to and from 125 fulfillment centers across the world.”
To me, all of Amazon’s recent initiatives bespeak a single overriding goal: control. The soft underbelly of the Uber-world is the tension between giving up control, so as not to incur legal liability through use of employees, and the need for control to maintain standards and quality. Amazon’s decision is logical and structural: our “entrepreneurs” and/or their employees will wear Amazon uniforms and drive Amazon trucks (and even fly Amazon jumbo jets); hence we will have more control.
Here comes the excruciating part: Amazon will argue that the scheme is somehow not under their control for purposes of liability. When the onslaught of frenetic activity results in predictable collisions, of one sort or another, it is the “entrepreneur”-employer who will be in control (though Amazon will dictate design of vehicles, provide packages, and set baseline working conditions for employees of those “entrepreneurs.”) If you buy that canard, the next argument will be that the entrepreneur is not an employer because it is dispatching its drivers through a “marketplace.” Politicians will bemoan that the dilution of responsibility is all the result of a “new” economy (‘cuz no one has ever delivered packages before) and propose an insurance system of some type providing pennies on the dollar for what was formerly a tort or workers’ compensation remedy). In the end, all risk is projected into the community as a classic economic “externality.” All the world is a “marketplace,” with no one in control. Ask not, dear reader, on whom the risk falls; it falls on thee!
Michael C. Duff