Amazon's Last Mile - Amazon Flex

https://gizmodo.com/amazons-last-mile-1820451224?IR=T
https://www.reddit.com/r/AmazonFlexDrivers/

The cost of free shipping, in many cases, is unsustainable. If customers or investors aren’t footing the bill, e-commerce companies could easily lose money on every free shipment. That’s sustainable if a new round of financing is coming; otherwise it can plunge a retailer or e-commerce company, especially a smaller one, into financial oblivion.

Direct-to-home has a supply chain cost three times higher than a store-based model. So when we say the internet retailer can charge less, how can that be? Maybe this is why so many retailers have so much trouble emulating Amazon’s model and making any money. It’s because it’s really expensive and it’s also why Amazon’s had trouble making money on merchandising sales. It’s a very expensive model and it’s not less expensive than the store-based model.”

Typically, Amazon recovers only about half of the amount it spends on shipping. Amazon’s net shipping costs—the difference between what it pays for shipping and the amount customers pay in shipping fees and Prime memberships—reached 7.2 billion in 2016. In the face of rising shipping costs, Amazon is building up its own shipping operation to reduce costs. 

Amazon usually leaves last-mile delivery up to third-party partners, including FedEx and UPS, yet to reduce costs they are making another move toward reducing its reliance on outside entities and vertically integrating its logistics chain. Amazon calls the program Flex.

Amazon Flex is increasingly using plainclothes contractors to deliver packages driving their own cars, competing for shifts on the company’s own Uber-like platform. Currently it’s deployed in dozens of cities but bound to grow. 

The independent contractors handle last-mile delivery for Amazon from their Fulfillment Center to Amazon customers.This is a huge threat to UPS, DHL and FedEx. Traditionally Amazon’s been great for business. Now it’s taking business away from them.