They took a stand against Amazon for their drivers. They say it cost them their businesses

By Matt McFarland, CNN Business

Ryan Schmutzer and Tracy Bloemer, owners of businesses that deliver packages for Amazon in Portland, Oregon, hit their breaking point this spring.

Both had run technically independent businesses since 2019 that usually rent vans owned by Amazon, and are paid by Amazon to deliver its packages. The businesses are called “delivery service partners,” or DSPs, for short. DSPs have about 20-40 vans and up to 100 employees. The DSP program has expanded to nine countries, creating 158,000 jobs at 2,500 DSPs, according to Amazon.

Amazon’s DSPs have played a critical role as the company grew rapidly during the pandemic, and relied less on delivery companies like UPS. But many drivers who work for Amazon DSPs have reported frustrations. Pay is low compared to competitors like FedEx and UPS. Turnover is high. Working conditions worsened during the pandemic, drivers say.

Schmutzer and Bloemer saw these frustrations. Their drivers grew stressed and frazzled as they rushed to load their vans each morning after Amazon cut back on loading time. Drivers said their days didn’t get better after leaving Amazon’s delivery station. They were loaded with so many packages that some frustrated DSP drivers quit in the middle of their shifts, Schmutzer said. He would sometimes coach his drivers through mental health struggles.

Schmutzer and Bloemer faced their own challenges. Their profits dwindled in 2020, they said, as their delivery territory shifted and they kept extra staff on board to handle heavy workloads. They say they raised concerns with Amazon, but that Amazon didn’t offer any lasting solutions.

“We were truly desperate,” Schmutzer told CNN Business. “I felt so trapped for so long that I didn’t know what to do.”

Schmutzer and Bloemer had a lawyer draft a letter and send it to Amazon on June 21 warning of litigation, demanding changes to improve conditions for workers and demanding $36 million to compensate for unspecified losses. They sent the letter on Prime Day, when Amazon would seem to be especially dependent on its DSPs to complete deliveries during the busy stretch. They asked Amazon to agree to their demands within two days. But Amazon refused, and Schmutzer and Bloemer’s business with Amazon was terminated.

The clash in Portland highlights the power dynamics between Amazon and its DSPs. DSPs that are unhappy with the terms Amazon dictates may find themselves powerless to get changes made, given the nature of contract work. Schmutzer and Bloemer wanted to bar Amazon from having access to view their payroll. (Amazon says it needs payroll access for audit purposes to ensure drivers are paid fairly and in accordance with local laws and its policies.)

The DSP owners were also tired of Amazon being able to fire their drivers, and then fine the DSPs if they didn’t find another driver to fill whatever routes opened due to the firing. Schmutzer and Bloemer wanted their drivers to have workloads that they felt were more manageable — no more than 150 stops and 250 package deliveries daily. (Amazon says it works with DSPs to make sure expectations are realistic.)

But DSPs have little leverage, as Schmutzer and Bloemer learned. Threatening to walk off the job during one of Amazon’s busiest times got them nowhere. Because Amazon limits the size of DSPs, the negative impact of a DSP that stops working is small. For comparison, when UPS workers went on strike in 1997, the company was forced to make concessions, including higher wages. UPS pay starts at $21 an hour, whereas average DSP driver pay in the US is only more than $17.50 an hour, according to Amazon.

When asked for comment on this story, Amazon told CNN Business that it refused Schmutzer and Bloemer’s demands after they abruptly threatened to stop servicing Amazon, which jeopardized their drivers’ livelihood. Amazon saw the DSP’s actions as a termination of contract.

“Our goal is to create great partnerships with our Delivery Service Partners and their drivers, and continue to use their feedback to make improvements. A number of impacted drivers have been hired by other DSPs in the area,” Amazon said.

A beloved boss

Schmutzer delivered pizzas in high school, and later won a FedEx Ground prize for drivers while working there. He said he identified with drivers, and wanted to create a fun environment for them when he started his own delivery company in 2019, Triton Transportation.

He’d surprise employees with free stuff, like water bottles, sweatshirts and ice cream — including vegan flavors to cater to everyone. If drivers were happy, turnover would be lower, he said. (Amazon DSPs struggle with high turnover rates.) One of his former drivers recalled how Schmutzer had noticed she got a new phone, and how he’d bought her a case for it.

“Everyone loves free stuff. To get a Triton hoodie after work one day, that was fun,” Schmutzer said.

CNN Business interviewed 15 employees who worked for Schmutzer, many of whom described him as the best boss they’d ever had.

“He changed my mind,” said former driver Douglas Stoddard. “I used to think they were all greedy.”

Bryan Davidsson, a former driver at Triton Transportation, described how tears ran down his face in January 2020 after learning his father suffered a stroke. Davidsson said Schmutzer saw his grief, and offered to pay for a plane ticket to South Africa. Davidsson said he could not have afforded to make the trip otherwise.

“A $1,200 plane ticket at least, to somebody they just met, I was shocked, I was like, is this really happening?” said Davidsson, who said he started at Triton a couple months before the incident.

Two other drivers, Samuel Vigil-Donovan and Andy Humber, recalled Schmutzer paying for a hotel for another driver until they could find permanent housing.

Daniel Meyerhoff, a former driver, recalled how when he was returning from a serious illness, Schmutzer gave him easy driving routes for a couple weeks to help him ease back in.

Even so, Meyerhoff said he would wake up and hate wondering how many packages he’d have to deliver each day. Schmutzer couldn’t overshadow the frustrations of working for Amazon, Meyerhoff and the drivers said.

“I loved working for Ryan [Schmutzer], but not Amazon,” said Mikki Schiffer, a former driver.

Schmutzer and his drivers describe clashing with Amazon over how many packages they had to deliver, and how much time they had to load their vans in the morning. Amazon’s arrangement with DSPs allows it to determine how many packages are delivered on each route. Schmutzer and his drivers felt the number of packages became unreasonable.

This spring, they describe Amazon cutting back on the time to load their vans with packages each morning at their delivery station outside Portland. Amazon, asked for comment, said that it works closely with DSPs to set realistic expectations that do not place undue pressure on drivers. Amazon also said it has a standard procedure for load-in, which is covered during driver onboarding.

The drivers describe frantically throwing packages in their vans, rather than organizing them in a way that would make their workday easy.

The drivers said they were regularly yelled at by Amazon employees at their delivery stations, who sometimes blew whistles or used bullhorns or sirens to implore the drivers to load their packages quicker and get on the road. Amazon, asked for comment, did not directly refute the claims.

Driver Andy Humber told CNN Business he took up smoking to manage the stress of the load-in, and to help prevent him from snapping at an Amazon worker.

Drivers were routinely upset at load-in, the time at the beginning of their shifts when they fill their vans with packages to deliver, the drivers said. Vigil-Donovan recalled being drenched in sweat, including his mask, and feeling like he was behind before his demanding day even started.

The drivers said Schmutzer would stick up for them, and protest how they were being treated.

Drivers at Bloemer’s DSP had similar issues. She said that in 2020 she started telling drivers to ignore the pressure of Amazon workers at the delivery station, and to only load as many packages as they felt safe with.

“If I saw a driver being frustrated, I’d be like, ‘nope nope nope you’re good. Give me the rest,'” Bloemer said.

Bloemer kept extra drivers on board to deliver the excess packages, which strained her finances, she said. DSPs owners like Bloemer are paid per route, so using additional drivers for a route adds to their costs.

Bloemer said during the pandemic in 2020 she complained to Amazon that the number of packages her drivers had to deliver was increasing significantly.

She said Amazon told her that was because she was having extra drivers pitch in on routes, leading Amazon’s algorithm to conclude the drivers could handle more packages. Bloemer said she was told the algorithm would reset its expectations after 30 days. So she said, for 45 days in 2020, she stopped sending additional drivers to help on routes drivers struggled to finish.

“Our drivers nearly broke. They were all on the verge of quitting,” Bloemer said. Most concerning, she said, was that the experiment failed — workloads didn’t lessen.

Bloemer said she went back to helping drivers, even if it met sacrificing profits.

Amazon, asked about the situation, said that wasn’t how Amazon’s routing system works, and the majority of Last Mile Delivery routes were completed at least an hour early in 2021.

Amazon also said that the vast majority of DSPs that opted in to being surveyed are within or above the projected profitability ranges for the program. Amazon declined to say if the sample was representative of its DSPs.

Schmutzer and Bloemer aren’t the only DSPs to report frustrations. Some DSPs have described to CNN Business that they left the program after feeling that Amazon did not adequately address issues that impacted their success. Some DSPs say they are often stressed given concerns that Amazon can pressure them by claiming they are in breach of contract. The culture of the DSP program is typical of an upstart, scrappy business that’s experimenting and evolving as it goes, according to a former Amazon employee who coached DSPs, and has been granted anonymity given concerns about retribution.

“I felt like I hit the lottery when I was hired. This is Amazon, it will be a well-oiled machine,” the person said. “It was a lot more fly by night, here’s what’s changed today.”

The profits problem

Schmutzer was also struck by profitability woes in 2020.

He said his business did well in the first half of the year. But Amazon had his business start to deliver to downtown as Portland dealt with protests over the summer. Several drivers told CNN Business that theft was worse downtown, and Schmutzer felt the impact. He said he was missing out on bonuses from Amazon, as package theft rates can impact how Amazon evaluates and compensates DSPs.

Amazon, asked for comment about the downtown struggles, said that no DSP is negatively impacted based on where they deliver. Amazon, asked for proof of this, declined to provide evidence that geography has no impact on success.

Both Schmutzer and Bloemer said they had their routes cut back by Amazon. Amazon, asked for comment, said that demand varies year to year and by season. It added that it works closely with DSPs to manage this variability.

Schmutzer and Bloemer said at times they had 60-70 routes. Bloemer said she was told in June 2020 that more DSPs would be brought to her delivery station until she was delivering only 40 routes.

She said she was appalled and didn’t understand why routes were being taken away from her business. She told CNN Business she didn’t like letting go of good people, so kept excess workers on the payroll, hurting her profits, as she had to cover their benefits.

“Never in my life have I been told, you’re too successful. We’re going to cap you and bring in competition,” Bloemer said.

There have been few efforts to unite DSPs to gain more leverage with Amazon.

A breaking point

Bloemer said the last straw for her came earlier this year when Amazon blocked one of her drivers from using its app, effectively firing him. The driver, Britton Bright, had received an infraction for hitting a mirror on a parked RV while stopping to make a delivery, he said. Bright said he didn’t realize he hit the mirror, so drove away after completing his delivery. Bloemer told CNN Business that she didn’t feel it should be a fireable offense.

Amazon, asked to comment, said that a small fraction of drivers are ineligible to deliver for Amazon if there are repeated or egregious safety or policy violations. Bright told CNN Business the incident was his only infraction, and no charges were ever filed against him. Amazon declined to detail why Bright was offboarded.

When drivers can’t access Amazon’s app, a DSP owner like Bloemer can’t assign them to a route, so they can’t work.

Bloemer said the firing forced her to scramble to find someone to fill in for all the routes she’d already assigned the driver to. If she didn’t, Amazon would fine her for not following through on the route, she said.

End of the road

Schmutzer, who once passed out wristbands to drivers that read, “Love what you do,” said it’s been mentally difficult since his DSP shut down. He’s watched as some of his drivers look for work. Some told CNN Business they didn’t want to work for any other DSPs. Others have joined other DSPs.

“I haven’t been great. There’s guilt without regret,” said Schmutzer, who said he’s getting regular updates from his drivers on how they are doing. “That means so much. A picture of them enjoying a drink at a pub, or anything. Triton [Transportation] is my family.”

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