Last month, Amazon launched Prime Now in Los Angeles and Orange County, a service that offers free two-hour delivery for Prime subscribers, plus one-hour delivery for an $8 fee.
It's all part of the instant-gratification economy, but according to a new class-action lawsuit, it comes at a cost. The suit alleges that Amazon and its subcontractor, Glendale-based Scoobeez, are underpaying their drivers and failing to give them the protections due to employees.
According to the suit, which was filed on Wednesday, drivers are paid $11 per hour plus tips. Because they are classified as independent contractors, and not employees, they do not get overtime. Much like Uber or Lyft drivers, they use their own vehicles and are not compensated for gas, maintenance or insurance.
"These are not entrepreneurs. They’re not in business for themselves," says the plaintiffs' attorney, Beth Ross. "They’re low-wage working people and they make less than minimum wage. These are people who took this job because they had no other options."
The suit argues that the drivers should be considered employees of Amazon and Scoobeez, because the companies exert substantial control over their work.
Many other companies that offer on-demand delivery are facing similar lawsuits. A judge in San Francisco recently granted class status to Uber drivers who contend they should be considered employees.
According to the new lawsuit, Amazon goes much further than Uber in controlling drivers' schedules and work activities. Amazon Prime Now drivers work regular shifts for an hourly rate and do not have the option to decline deliveries. They also wear Amazon Prime Now uniforms and are not allowed to work for other firms.
As the service ramps up locally, Scoobeez has hundreds of drivers working at distribution facilities in Silver Lake, Irvine, Santa Monica and Manhattan Beach, according to the suit. Ross says Amazon controls the dispatching from those warehouses.
The company operates that way, she says, because "Amazon actually needs live bodies in the warehouse at the ready to bring you the charger you left in your hotel room in two hours. ... They can’t wait around for people to be available. They need bodies in the house ready to go."
Scoobeez began by offering delivery service to business customers via motorbikes. According to its website, drivers must own their own motorcycle or scooter or rent one from the company for $5 to $10 a day. It has since expanded to deliveries by car, and its Amazon drivers all use their own cars.
Amazon has been testing its own delivery system, called Flex, according to a report in the Wall Street Journal. Flex drivers also will be independent contractors, but according to the report they will be paid better, about $18 to $20 an hour.
Scoobeez declined to comment on the suit. "It’s our policy not to make any statements about pending actions," said John Petersen, a company attorney.
Amazon also demurred. "We have a long-standing practice of not commenting on pending litigation," said spokeswoman Kelly Cheeseman.
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Among the named plaintiffs is Khaleed Alkoljak, who Ross says is a Syrian refugee. The four plaintiffs worked for the company for about a month before leaving in early October.
The suit seeks back pay plus a permanent injunction to prevent Amazon and Scoobeez from operating in this manner.
"This is not a hard case," Ross says. "If they’re going to continue to do business as they do it, they’re going to have to treat people lawfully."