Australian transport union accuses Amazon Flex of underpaying drivers

Coincides with New South Wales kicking off its inquiry into the future of work.
Written by Aimee Chanthadavong, Contributor

Transport Workers Union (TWU) has hit out at Amazon, accusing the global e-commerce giant of underpaying Amazon Flex drivers.

Amazon Flex was launched in Australia at the start of the year. At the time, Amazon Australia boasted it would give individuals the chance to earn money while delivering Amazon packages to customers.

Much like Uber, individuals are required to use their own vehicles, and at a minimum, are required to have personal car insurance and compulsory third-party personal injury.

When these compulsory insurance requirements are met, Amazon also provides delivery partners with Amazon Insurance Coverage at no additional cost, which includes auto liability coverage, third-party property damage, and contingent comprehensive coverage. But the coverage is only applicable when individuals are using Amazon Flex to deliver packages or return undelivered packages back to a designated location.

While it is unclear how much individual contractors earn or whether Amazon will take a share of those earnings, Amazon had assured that delivery partner rates are "competitive".

"Our delivery partners are paid per delivery block rather than per hour and block rates vary depending on a range of different factors, including time of day and day of the week. The delivery partner knows the estimated duration and payment for each block before they accept it on the Amazon Flex app," an Amazon spokesperson told ZDNet during the launch.

However, TWU said following a financial examination of Amazon's pay rates, it has revealed all Amazon Flex drivers are allegedly being paid "well under Australia's minimum wage" when costs such as insurance, petrol, and maintenance are taken into account.

"For years, workers and unions have exposed the gig economy sham for its exploitation and dodging of industrial and WHS legislation. Now here we have a retail giant that has profited immensely from the pandemic on a mission to undercut legitimate companies and tear down our labour standards," TWU national secretary Michael Kaine said in a statement.

See also: How the gig economy is reshaping the IT enterprise (TechRepublic)

TWU has called for the Australian government, and in particular, the New South Wales government, to introduce laws that would force Amazon to adhere to Australia's safety standards and labour practices.

"Amazon is undermining Australian transport companies that obey Australians laws, recognise Australian safety standards, and uphold basic Australian values about work. Unlike these companies, Amazon Flex contributes zero to our economy or our communities," TWU's NSW secretary Richard Olsen.

"If Amazon Flex is allowed to continue operating unregulated, people will be seriously injured and killed. That's not an extreme prediction, it's what happens when the business model being used applies extreme time pressure to a desperate underpaid person behind the wheel of an unregulated vehicle."

An Amazon Australia spokesperson has described the allegations as "untrue and unfounded", reiterating that the delivery partners are paid a "very competitive" rate, and that the company "meet or exceed regulatory requirements" in Australia.

"We pay delivery partners quickly and provide them with transparency and certainty, as they know the minimum amount they will be paid for a delivery block in advance. Our delivery partners tell us they enjoy the flexibility they have to schedule delivery blocks around their existing commitments, helping them to make extra money. When the overall payments for the services are taken into account, our pricing structure meets or exceeds minimum industry rates," the spokesperson told ZDNet.  

The call by the TWU coincides with NSW Parliament kicking off its inquiry into the impact of technological and other change on the future of work and workers in the state.    

Chaired by Labor's spokesperson for the gig economy Daniel Mookhey, the committee will specifically examine the impact of the gig economy and the automation of work on workers, including existing workplace protections. It will also examine how government can regulate this new form of work to protect workers and provide skills and training to help adjust to new forms of work.

The committee expects to deliver its final report in late 2021. 

Must read: Won't get fooled again: Gig economy second wave begins to break    

The NSW inquiry follows in the footsteps of the Victorian government, which is currently conducting its own inquiry into the on-demand workforce.

The Victorian government released a report into the inquiry that put forward a total of 20 recommendations designed to improve protection for on-demand workers.

One of those recommendations called for the federal government to get involved and ensure existing tests, remedies, and work standards are revised to improve certainty, choice, and conduct for gig economy workers.

If the federal government does not act, the report recommended for Victoria to take the lead and collaborate with other states to develop administrative and legislative options that would improve choice, fairness, and certainty for gig economy workers.

The inquiry also uncovered how platforms have been deliberate in framing their arrangements with workers to avoid complying with workplace laws and paying associated costs.

The Victorian government is now seeking submissions from on-demand workers, businesses, and Victorians who use digital platforms for goods and services. Deadline for submissions during the consultation period closes on Tuesday.

Updated 12 October 2020 3.44pm (AEDT): Amazon Australia comments added.

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