Given the volume of these orders will far exceed Flex’s capacity in the near term, Flex can guarantee drivers reliable work and compensation for their scheduled blocks. More precisely, it’s selected delivery orders that end customers have placed on and are being fulfilled by Amazon. The other side, delivery customers, is all just Amazon.
However, Amazon Flex has an advantage because they currently only need to manage one side of the platform. On top of this, Uber is also scaling up UberRush, a service which uses independent drivers to deliver packages. The tension between Amazon Flex and ridesharing services is clear – they’re fighting for the same pool of drivers. Flex has been selective in scaling its operations, targeting dense cities with high Amazon and ride-sharing penetration, thus utilising local network effects already in place.Īmazon Flex has an advantage compared to ridesharing companies Furthermore, Flex gives Amazon greater control of their supply chain to ensure packages are delivered on time and customers are happy.Ĭreating the platform is made all the easier by the fact that there’s an existing pool of drivers, conditioned by the ride-sharing world, ready to take on this work.
With Flex, Amazon is able to save around 30% of these last mile costs that would otherwise go to local couriers. local delivery) accounts for about 50% of all shipping costs. In 2015, Amazon’s shipping costs exceeded $5bn and they have been growing as a proportion of revenue. Shipping costs have perpetually been a key concern of Amazon.
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