By Ricardo Lezama Amazon is wrestling with a recessionary environment, increased cost and reputational risk – does the company still make sense to investors, customers and the public? Amazon is trading slightly above 100 dollars a share and trending down as of this writing.
At times, the amount of criticism leveraged against Amazon is also a function of how large the company is in terms of market share. Socially, Amazon also occupies a large share of the public imagination since it is able to impact so many facets of consumer behaviour. Naturally, the perception is that Amazon is ‘big’ and necessarily ugly, but I would caution on such an outright dismissal of the company. There is blame to distribute as well to American work culture.
Somewhere at the lower middle management level, Amazon generates a huge problem that is as much Amazon’s as it is American work culture generally. Amazon permits peculiarly American cruelty to be scaled to unprecedented heights. No matter the cause, the reputational risk that this poses to Amazon can not be undersstated.
The once in a lifetime Black Swan event that left Amazon with a huge work from home, buy everything online windfall is starting to fade out. This means there is now less money, more problems on every level.
Extreme Neglect In IE
A group called the Inland Empire Amazon Workers United is attempting to unionize and organize company staff. They allege that the Amazon corporation is not meeting basic requirements for worker safety and management is too prone to individuals safeguarding their basic integrity.
They point to instances of worker safety lapses as their reason for existing, like when a man in San Bernardino suffered from heat stroke due to intense indoor settings. They say these instances are more common than anticipated. A man in Oxnard was diagnosed with Tubercolosis on Friday of last week (April 14, 2023), and while Amazon did the right thing with regards to notifying workers and next of kin, the spectre of suspicion hangs over them.
There is sustantive evidence for their point even from usually tepid federal authorities. According to OSHA, the company’s warehouses have double the injury rate of other comparable warehouses. This could be unique to the entity’s obsession with time based studies as opposed to more ergonomically sound approaches to work. Amazon has 6.6 injuries per 100 workers, as opposed to a 3.3 injuries per 100 workers in other warehouses.
Like most gig work, Amazon Flex’s program is designed to squeeze as much out of the contingent workers in the shortest timeframe and lowest price bound. In the Inland Empire, the Amazon corporation has gained an unsavory reputation as an employer of last resort for many now recently unemployed, underemployed or graduated individuals in the region.
Amazon Flex Program – 3rd Party Delivery Drivers
Amazon’s business model does not only involve high-pressure settings with workers churning out packaged goods.
Amazon also makes use of contingent workers for the delivery of these packages. These contractors provide their own personal vehicle repurposed for the delivery of packages throughout the United States. Often, individuals with corporate cars and large cargo trucks can be observed delivering packages throughout the Southern California area.
Workers compete with themselves and others
The application calculates which workers will work and for how long, according to a UC Hastings study. For example, in the case of Uber, if a worker tends to stop working after 100 dollars, then the rideshare app will stop serving them customers to prolong their coverage. Similarly, Amazon is likely to not present their contractors with a series of offers exceeding their usual average.
How Does Amazon Flex Work? The Good, The Bad, the Pay
In general, a contract worker of the Amazon flex application shows up to a designated pickup warehouse. The application will first verify that the actual contract worker is indeed who they say they are prior to the shift assignment. A photo is uploaded, but it is unclear whether this verification is done by a worker at the Amazon warehouse or a computer program.
There are rumors that individuals will find ways to aggregate shifts and then assign these ill gotten shifts to subcontractors for a lower amount. In our opinion, Amazon does a good job of reducing middle men in the process of contracting out their deliveries and verifying identity. This protects subcontractors who may be too desperate for income to make a more informed decision.
The Amazon Flex app may restrict what opportunities are seen by certain workers depending on criteria defined by offshore analysts. In the Riverside County area, the least a worker has reported making is somewhere near 67 dollars over a span of 3 and a half hours. However, if we round up an average of 30 minutes more of uncounted work, then most people are pulling in an average of 16.5 dollars per hour – barely above minimum wage.
Most people report that nearly every shift involves more work than the application documents because of factors due to Amazon’s warehouse operation.
They offer a payout to an individuals debit or bank account. The bank account option is free and takes places on two fixed days of the week, but the debit card option can take place during any weekdays and charges 50 cent per deposit.
Map Safety Issues – Major Safety Issue
Amazon contract workers attest that delivery points have an irregular nature with complexity not properly documented at the application level. Some of the tasks will extend far beyond the reported time on average of 25 minutes to 1 hour. People live in varied types of dwellings, and Amazon’s implementation of Mapquest and lack of a Carplay based app is a major deficiency.
Flex drivers must look down for the most practical experience of moving from place to place. Although an integration with Google or Applications exist, an individual must manually input these for every location, which in the time-crazy setting of Amazon Flex is not viable. This would require a longer stop in between deliveries.
Is Amazon A Buy?
Personally, at 102.09 (per BBG) this stock is cheap!
Dont ignore the problems, however, since these snowball into greater issues. Amazon has an impressive moat of technology and logistics. They are a tepid buy if you have nothing else to purchase in terms of assets. Amazon’s impact and essentialness is like a public utility, but they must adapt fast to both changes in AI and IT infrastructure, as well as to pressing demands for better workforce management.
There was a recent Edgar filing in which investors sought to install an hourly worker to represent this vulnerable group. If adopted, this could be a step in the right direction for all parties. If ignored, then Amazon would position themselves in a consistently defiant position with respect to all needs, possibly at their own peril since a growing segment of the business population is conscious of their monopolistic use of their platform to mine customers away from small business. Reputational risk is hard to defeat over enough successively bad incidents.