Amazon Plans To Increase Reliance On 'Flex' Workers For Grocery Supply Chain: Report

Amazon.com Inc AMZN is planning to expand its "Flex" driver program, according to a Bloomberg report Monday.

What Happened: Flex drivers are categorized as independent contractors with the e-commerce company and are responsible for handling deliveries using their personal vehicles.

According to Bloomberg, these contractors will now not only be handling deliveries but will also gather and bag the products.

Such a move would further help Amazon control the costs, Bloomberg noted. Flex drivers, unlike the company’s employees, are considered independent contractors and aren't eligible for additional benefits like medical insurance or sick pay.

Amazon on Monday said it was hiring 100,000 workers, both part-time and full-time, for its U.S and Canadian operations, in the fourth such drive since the pandemic took hold in March.

Why Does It Matter: The gig-economy is expanding after the pandemic outbreak forced the economy into recession, Bloomberg noted. Even drivers engaged with ride-sharing apps like Uber Technologies Inc. UBER and Lyft Inc. LYFT are seeking an alternative source of income by delivering online orders.

Ride-hailing companies have been involved in a tussle over the classification of workers as employeers or contractors in California.          

In August, both riding sharing apps Uber and Lyft were ordered by a judge to treat workers as employees with benefits in the state. The presiding judge commented that branding gig economy drivers as contractors not only defies the economic reality but also lacks common sense.

Price Movement: At the end of Monday’s after-hours trading session, AMZN stock price was $3,109.00 after marginally rising by 0.19%.