You are about to leave Risk Strategies website and view the content of an external website.
You are leaving risk-strategies.com
By accessing this link, you will be leaving Risk Strategies website and entering a website hosted by another party. Please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of Risk Strategies website. We encourage you to read and evaluate the privacy and security policies of the site you are entering, which may be different than those of Risk Strategies.
When Amazon announced plans to install AI-enabled cameras in all delivery vehicles, they declared that it was to improve safety and prevent reckless, dangerous behavior. Perhaps. However, increased monitoring will not address the core issue that fuels negligent driving. By setting aggressively high delivery quotas and paying delivery service partners (DSPs) low rates, Amazon has created a culture that incentivizes DSPs to ignore traffic laws in order to hit delivery targets.
Many DSPs contracted with Amazon are operating on shoestring budgets and razor-thin margins. They cannot afford to fall short of Amazon’s delivery demands and are therefore pressured to “game the system” and violate safety protocols, seeing this as their only path to profitability and survival. Recent reports revealed that Amazon delivery companies are explicitly instructing their drivers to turn off the app that monitors speed and provides a safety score. Drivers were encouraged by the DSP owners to break traffic laws in order to deliver packages faster. This behavior both puts lives at risk, and calls Amazon’s commitment to safety into question.
It is important to note that Amazon itself is not directly ordering reckless behavior. They’re the entity requiring drivers to use the monitoring app and maintain a high safety score. Publicly, Amazon calls any unsafe driving by DSPs unacceptable. They even offer financial incentives for safe driving records. Amazon, however, pays DSPs per package delivered on time, with additional bonuses given for increased delivery speeds and “efficiency”. By turning the Mentor app off, DSPs are trying to bypass Amazon’s driving rules and fool the monitoring app so they can collect their incentives and increase their revenue.
If Amazon wants to truly build a culture of safety, they need to re-evaluate the contradicting demands placed on their DSPs. You can ask workers to drive safely, or you can ask them to meet sky-high delivery targets, but it is unrealistic to demand both.
Insurance Implications and Considerations
Negligent Entrustment and Motor Vehicle Claims
Text messages by DSP owners and managers pressuring their delivery drivers to drive recklessly and turn off the safety monitoring app are documented, which puts their insurance carriers, and the DSP business, in a precarious situation. Claimants armed with this type of evidence could lead to so-called nuclear verdicts with judgements well over traditional auto policy limits of $1M.
DPSs Carry All Risk, Consider an Umbrella Policy
DSPs working for Amazon must understand that they are truly on their own when it comes to losses. Amazon pushes all risk onto their DSPs, requiring only $1 million in commercial auto insurance. This leaves these companies, many of them small delivery companies, incredibly vulnerable when large claims surface. Nuclear verdicts are on the rise across the transportation industry and this trend will certainly drive up settlement payouts for the claimant. DSPs should consider adopting an Umbrella insurance policy to help protect from these types of potentially devastating lawsuits.
Employment Practices Liability Insurance (EPLI) covers businesses defending against claims by workers that their legal rights as employees have been violated. DSPs explicitly encouraging behavior that puts their drivers at risk could be perceived as a form of workplace harassment, exposing them to lawsuits. Despite its additional cost to DSPs already squeezed on margins, EPLI coverage may prove critical if DSP drivers begin to file harassment or emotional distress claims.
Risk Strategies Transportation offers holistic and tailored coverage policies built exclusively to mitigate exposures associated with the delivery industry. We’ll be watching closely as we learn the long-term effect of this behavior on DSPs and insurance policies.
Want to learn more?
Find me on LinkedIn, here.
Connect with the Risk Strategies Transportation team at transportation@risk‐strategies.com.
Email me directly at bpaulozzi@risk‐strategies.com.