The encyclopedia · Strategy & Leadership · Operational decision · 2015–2019
Amazon turned last-mile delivery into gig work instead of owning a fleet
Amazon Flex, launched 2015, pays contractors per route; by late 2019 gig drivers handled half of Amazon's deliveries and FedEx was dropped.
Amazon.com
the move
Amazon once leaned heavily on USPS, UPS and FedEx for the last mile, which left it exposed to carrier pricing and network terms.
In 2015 it launched Amazon Flex, a gig-style program where anyone with a car delivers packages for a block-based fee. Drivers supply the vehicle, so Amazon carries none of the purchase or maintenance cost and scales the pool with demand.
By 2019 Amazon ended its FedEx contract and was completing half of its deliveries with gig workers by year's end, turning the last mile into a variable, competitor-free cost.
why it works
- A contractor fleet scales up and down with demand, not with a lease.
- BYO vehicle removes capital and maintenance from the balance sheet.
- Paying per block keeps quality and coverage contestable.
what transfers
If your demand is spiky, buy delivery capacity by the unit rather than owning a fleet sized for the worst day.
what came after
Amazon grew its own delivery network while keeping Flex for the variable edge. The model spreads to whole industries (Uber, DoorDash, Instacart), but gig delivery also brings variability in vehicle quality and worker retention, which is why fleets need service and inspection networks.
references
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