New York City’s Plan to Drive Out Amazon

A City Council bill would make delivery more expensive without necessarily improving safety.

Courtesy Michael Kappeler/picture alliance/Getty Images

New York City has Amazon in its sights. A bill introduced by Council Member Tiffany Cabán would require Amazon and other delivery companies to obtain a license for last-mile deliveries in the city. And it would force them to abandon the subcontractor model that now powers much of the city’s package-delivery system, instead obliging firms to hire employees directly.

Supporters describe the measure as a worker-safety bill. In reality, it would make it much harder for Amazon to offer fast, affordable delivery in the city. The likely result would be fewer delivery jobs in the five boroughs, higher costs, more truck traffic from outside the city, and less access to the wide range of affordable goods that Amazon and other online retailers provide.

Last-mile deliveries—the trip from a depot to a customer’s home or business—are generally the most expensive and complex part of delivering goods, depending heavily on local knowledge and access. As such, many companies—including Amazon and FedEx—partner with smaller firms to handle this part of the process. Such firms have a better understanding of area neighborhoods and geography, their smaller workforce means less bureaucracy, and any liability falls on the contractor, not Amazon.

“Legislators completely fail to grasp” logistics, Ty Barnes, owner of Bronx-based NorthStar Logistics, told me. NorthStar is one of over 40 Amazon Delivery Partner firms operating in the city. “When you get a sheet of delivery addresses, it is incredibly complex,” Barnes said. Because he knows the Bronx “inside and out,” he can give his team “real-time, precise direction.”

The subcontractor model also creates opportunities for small business owners and workers. “A lot of my drivers come from tough backgrounds,” said Barnes. They are often in “constant ‘sink or swim’ survival mode.” A local operator, he argues, can provide structure, mentorship, and opportunities that a larger corporation often cannot: “Corporate Amazon or an outside entity doesn’t have the time, the cultural context, or the desire to teach these kids those life skills.”

If Amazon and other firms are forced to hire delivery workers directly, many of those jobs will move outside the city or disappear altogether. The smaller local firms that currently operate in the five boroughs would be squeezed out, while large companies would face strong incentives to relocate last-mile depots to Westchester, Long Island, or New Jersey.

It’s also not clear that the bill would improve worker safety. Neither Amazon Delivery Partners’ nor other companies’ work conditions are particularly egregious. Besides creating pathways for delivery employees to become entrepreneurs in their own right, wages average $24 per hour, and all Delivery Partners are required to offer healthcare to employees.

Supporters point to traffic violations and workplace injuries as evidence that the current system is dangerous. But many of the cited “safety violations” are parking violations, including citations for parking in “no standing” zones, in bike lanes, or double parking. These are problems, but not ones that an end to subcontracting would fix.

The city comptroller’s office, which supports the bill, has noted an injury rate of 8.3 per 100 employees for last-mile workers, compared with a national average of 2.4 per 100 private-sector workers. But delivery work is more physically demanding and riskier than other jobs. As it turns out, New York’s rate is on par with the national average of 8 injuries per 100 workers for couriers and messengers.

The bill may even make the safety problem worse. If last-mile facilities leave the outer boroughs, delivery vehicles will spend more time on the road before they even begin their routes. Longer trips mean more vehicle miles traveled, more congestion, and more opportunities for crashes. They also mean more emissions in neighborhoods already burdened by truck traffic.

And, of course, more lost jobs. If companies move outside the city, up to 10,000 delivery-partner and warehouse jobs in the city could be at risk, according to analysis done by AKRF, a firm retained by the Five Borough Jobs Campaign.

“My employees live in the Bronx,” Barnes said. “If they don’t own personal vehicles or have reliable transportation to commute out to deep Long Island or New Jersey every morning, they are going to be left completely without jobs.”

Consumers would bear the costs as well. If companies relocate, delivery fees could increase by an estimated $664 per customer, each year, assuming service were to remain constant. If they stay, they will face higher regulatory and staffing costs. Either way, those costs will be borne by consumers.

New Yorkers already see a “regulatory surcharge” on ride-sharing and food-delivery receipts—this bill would add yet another. A measure sold as a way to protect workers and improve safety would instead make delivery slower, costlier, and less accessible—and likely fail even on its own terms.