In the world of last mile deliveries, Amazon is seen by many as an innovator. Its booming delivery network of contracted Amazon DSPs, and use of new tech in delivery systems, has set the pace for the industry, leading others to adopt parts of its practices. But some of the innovations have been harmful and not worth replicating.
Most recently, Bloomberg detailed how Amazon Flex drivers were being fired by an algorithm that determined if their performance was not up to par. In many cases, these firings occurred after events beyond the driver’s control: they were sent to deliver packages to an apartment building with locked gates at dawn, they got a flat tire, they couldn’t open a delivery locker. Even when these drivers immediately reported these issues, their ratings suffered, eventually leading to their termination.
Human beings have seemingly been removed from this management process by design and with intention. Jeff Bezos, Amazon executive chairman, is said to believe that machines make more accurate and efficient decisions than humans. Amazon has made a calculation that would be risky to any smaller business: trust the algorithms, absorb blowback related to the bot’s mistakes, replace fired drivers, and pay people to investigate firings reported as wrong. This strategy, they believed, would save them money in the long run.
Finances aside, this decision has real-world effects on drivers, sometimes putting them in dire financial situations. Amazon may be shifting HR management activities to machines, software, and bots, but we recommend proceeding with caution when considering doing the same. Some potential issues include:
Business leaders often look to Amazon’s innovations as the next big thing, but in this case, we can learn a lesson in what not to do. Keep humans at the center of your business and do not rely too heavily on data-driven algorithms, and bots. Flaws and mistakes could end up costing you.
Risk Strategies and our dedicated team of Transportation experts offer counsel on the biggest questions in the industry. If you’re seeking the best delivery management techniques and ideal coverage for your delivery business, reach out below.
Want to learn more?
Connect with the Risk Strategies Transportation team at transportation@risk‐strategies.com.
Email us directly at bjungeberg@risk‐strategies.com and bice@risk‐strategies.com.