Worry of Amazon Exit Fees Trap Delivery Contractor: Report

  • A veteran who started an Amazon delivery business told Protocol he wants to shut it down.
  • He said he’s afraid of potential exit fees he could owe Amazon if he does terminate his contract.
  • He told Protocol that Amazon charges for damages to the vans and the damages can run upwards of $100,000.

A veteran who set up an independent business delivering packages for Amazon told Protocol he wants to shut his business down but is too afraid of anticipated exit fees imposed by Amazon.

Amazon’s vast delivery network is partly made up of Delivery Service Partners, third-party contracted firms which deliver the tech giant’s packages to customers.

The veteran, along with other DSP owners who spoke to Protocol, said they are currently dependent on federal paycheck protection program loans to sub their income, or they previously were.

The veteran told Protocol he wants to close his business, but is too scared of the exit fees he could incur.

“They make it extremely difficult for you to get out of the program,” he said. “If I were to say, ‘Hey, I can’t do this anymore.’ They write down every nick or scratch on a vehicle; the average person that tries to return the vehicle, you’re looking at well over $100,000 of damages they are going to find in your fleet.”

Amazon did not immediately comment when contacted by Insider about Protocol’s report.

Amazon offers DSP owners a “flexible lease” option which lets them lease Amazon-branded vans from an unnamed “third party fleet management company.”

The veteran first set up his DSP after he saw an ad which specifically encouraged veterans to apply by saying the usual requirement for applicants to have $10,000 in startup cash could be waived for veterans, he told Protocol.

Protocol granted the veteran and other DSP-owners it spoke to anonymity because they were afraid Amazon might retaliate against them.

Vice also published a report on Monday about Amazon DSPs shutting down their businesses.

One DSP-owner told Vice she shut down her business in October 2021 because she was falling into debt, and showed the publication an invoice for $64,465 for damages on 20 vans.

DSP owners have butted heads with Amazon before over the degree of control it exerts over them and their drivers.

A woman who started a DSP filed a lawsuit against Amazon in January saying the tech giant squeezed her profit margins with its performance standards.

That lawsuit said Amazon charges DSPs for returned vehicles through its van-leasing contractor when a DSP contract is terminated, and that the DSP was charged “$19,000 in exit fees each for multiple vans.”

CNN reported in September 2021 that two DSPs threatened litigation against Amazon over working conditions for the their drivers. Following the legal threat, Amazon terminated its contracts with them. The DSPs then filed a lawsuit against Amazon in October saying it made “unreasonable” demands of their drivers, Bloomberg reported.

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