Amazon is set to give a salary boost to its contracted delivery drivers, announcing a $440 million investment in its third-party delivery program for the year. The aim is to lift the average hourly wage to $20.50 by the middle of October.
Introduced in 2018, the Amazon Delivery Service Partner (DSP) program helps entrepreneurs establish delivery operations by providing them access to Amazon’s resources. Over its five-year existence, the program has received more than $8.9 billion in investment from Amazon, created nearly 280,000 driving positions, and generated a revenue of $45 billion.
Beryl Tomay, Amazon’s Vice President of Last-Mile Delivery and Technology, explained that the investment is targeted at DSPs, enabling them to offer competitive salaries to attract and retain quality staff.
Currently, DSP drivers in the U.S. earn an average hourly wage of $19.28, which varies by state.
Amazon also disclosed that it is expanding its Next Mile education initiative. This will provide eligible DSPs with access to 2,000 academic programs, covering tuition costs of up to $5,250 annually.
Moreover, the “Together, We Give” program is being launched, allowing DSPs in the U.S. and Canada to apply for grants of up to $5,000 for donations to local non-profit organizations.
The compensation increase announcement follows the inaugural delivery driver strike, which kicked off in Southern California in June.
The strike originated in Palmdale, California, after 84 Amazon DSP drivers joined the International Brotherhood of Teamsters union, and has since spread to other parts of the state, including the Bay Area and Hollister.
It remains to be seen whether Amazon’s new wage and benefit initiatives will lead to the end of the ongoing strike.
