Amazon is cutting funding for some delivery companies to monitor drivers on the road

Hayley Peterson/Business Insider
  • Starting Thursday, Amazon will stop paying dispatch fees to the companies that deliver its packages to customers.
  • Dozens of delivery companies use these fees to employ key positions, called dispatchers, at Amazon delivery stations across the US.
  • Dispatchers directly manage drivers by assigning them routes and vehicles and monitoring their delivery progress daily in real time. They also serve as a resource for drivers needing assistance on the road.
  • Amazon declined to comment for this story.

Some of Amazon’s biggest delivery companies are getting a pay cut.

Starting Thursday, Amazon will stop paying dispatch fees to its delivery service partners, or DSPs, according to an internal memo that was reviewed by Business Insider.

Dozens of delivery companies use these fees to employ key positions, called dispatchers, at Amazon delivery stations across the US. The funding changes could wipe out these jobs.

Dispatchers directly manage drivers by assigning them routes and vehicles and monitoring their delivery progress daily in real time.

Dispatchers may contact drivers if they fall behind schedule, and they serve as a resource for drivers needing assistance on the road.

Dispatchers also play a key role in submitting tickets to Amazon to apply for extra payment due to unplanned delays that might cause a driver to fall behind, such as inclement weather or issues with Amazon’s routing software.

Business Insider reported in September that one delivery company had started asking its employees to text dispatchers immediately if something slowed them down so that they could apply for extra payment from Amazon.

Without dispatchers, DSPs will have less leverage to address funding shortages due to delivery delays, according to three people with knowledge of Amazon’s delivery system.

Amazon declined to comment on this story.

The funding changes impact delivery companies that are part of Amazon’s original DSP program, internally referred to as DSP 1.0, that are migrating to its new program, called DSP 2.0. These companies include some of Amazon’s largest and most long-standing delivery partners.

Amazon launched the new DSP program last year. It’s structured differently than the original program and it never offered dispatch fees. Many dispatch responsibilities can be handled directly by DSP owners under the new program. Amazon handles the on-road support for drivers of these companies, as well as Amazon Flex drivers.

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