Amazon touts this as flexible work for people who want to set their own schedule or make some extra money, but it also says drivers might choose to work as many as 12 hours per day (with no overtime pay, of course). So let's just assume this will be full-time work of 40 hours per week: $18 x 40 hours = $720 per week or gross income of $2,880.00 per month.
- Let's assume he or she will burn about a gallon of gas per hour: $480.00 per month.
- Commercial vehicle insurance will be a must, or the driver will be left holding the bag if an accident occurs because personal auto policies do not cover business activity. Costs vary widely so I will just make a guess that it adds $50.00 per month.
- Extra maintenance on the driver's car is hard to estimate, as well as its decrease in value with additional mileage and wear-and-tear. Let's assume it's just an additional $100.00 per month.
- FICA and Medicare taxes will be $220.32 per month, additional to what a wage employee would pay (employers normally pay half and employees pay half, so this represents the 50% additional part paid by the driver as a contractor).
- If the driver were a full-time employee elsewhere, he or she could expect 2 weeks of paid vacation. Instead, the driver will have to save money to effectively pay him/herself for 2 weeks during the year: $120.00 per month.
- As with vacation pay, the driver will be responsible for any time taken off due to illness. Let's allow 1 week per year, which the driver must save up in case it is needed: $60.00 per month.
- A full-time employee could expect at least 7 paid holidays (Christmas, New Year, Memorial Day, Fourth of July, Labor Day, Veterans Day and Thanksgiving). The Flex driver will have to save for those holidays: $84.00 per month.
- In lieu of an employer paying 50% of healthcare insurance, the driver must pay the entire amount, but we will count just the theoretical employer's share as an expense for the driver: $250 per month.
- Unemployment benefits can't be calculated under this scenario easily. I will assume a driver should save 2 weeks of pay in order to have a small cushion to find another job in the event it is necessary: $120.00 per month.
Now if we add up all of the costs which Amazon has managed to offload onto the Flex driver (all the while convincing him/her that he or she is "empowered"), we get $1,484.32 per month for expenses.
So, from gross pay of $2,880.00 per month, the driver will actually have a net income of $1,395.68 after expenses. That works out to $8.72 per hour. In other words, about the same that Walmart is now paying as a starting wage for employees.
Of course, Amazon will promote the flexible hours and independence of its scheme. But how flexible and independent can it be? Most people are going to want deliveries during "Walmart" hours: 8 AM to 9 PM or so. A Flex driver can't unilaterally decide to deliver all packages between 11 PM and 7 AM to suit his or her unusual but "flexible" personal schedule.
As to independence, well, that's another word for "tough shit, you're on your own." There seem to be no guarantees for Flex drivers: if there aren't enough packages to occupy available drivers in your area, you won't get 4 or 6 or 12 hours per day of work. Retailers like Walmart are also notorious for ignoring workers' needs with schedules that don't provide full-time hours and wages, but at least there's usually a reasonable expectation that a certain number of shifts will be provided.
All in all, it's just another corporate scam to "empower" workers by making them non-employees, bearing all of the costs and responsibilities of employment while receiving none of the benefits or social obligations from employers.
The Uber-ization of the American workforce has begun. It won't end until the last wage-earning employee in America is reduced to underbidding his or her fellows and groveling for a 10 minutes-long Uber-job for a pittance that barely permits survival (see my diary "Walmart and Uber team up to transform the economy with Wubermart superstores" to get an understanding of how demeaning that would be). The free market will do everything in its power to liberate capitalism from social and financial responsibilities and place them on the broken back of labor.
Free for me, not for thee, peasant.
(Note: I didn't even mention the awful policies and effects of Amazon's outsourcing of warehouse workers, stock pickers, and so on, which has been going on for years. Google it or wait for a future diary)
11:00 AM PT: My apologies: I realized I had undercalculated the amount the driver would need to save for paid holidays. I have updated the text with the correct amount and recalculated the overall totals. The effect pushes the net hourly wage well below $9.00 per hour.