Germany to keep Amazon delivery on a short leash

Ethan Wolff-Mann
Senior Writer
A worker collects goods for purchase orders at the giant storehouse of the Amazon Logistic Center in Rheinberg, Germany, Wednesday, Nov. 14, 2018. Amazon in Rheinberg hired extra workers for the Christmas sales. (AP Photo/Martin Meissner)

Germany is not going to give companies like Amazon (AMZN) any leeway when it comes to working conditions and responsibility over last-mile delivery.

The country’s labor ministry, led by Hubertus Heil, announced this week that it was going to introduce a law that would make companies in the parcel industry liable for its subcontractors’ behavior and working conditions of its delivery personnel.

These protections already exist in other industries like the meat and construction industries. But the growth of e-commerce and specifically express services has driven the Ministry to expand the worker protections against exploitation as well as cracking down on failure to pay social security taxes and medical benefits.

Though the company did not cite Amazon specifically, Amazon recently announced a push to open 11 distribution centers in Germany and hire significantly, paying 12.80€ per hour, which is about $14, above minimum wage but less than DHL drivers make, Reuters reported the day before the Ministry’s decision.

“Across Germany, small and medium sized businesses provide work opportunities to thousands of individuals who deliver packages to Amazon customers,” said Amazon Germany's Ole Wulff. “Amazon requires all delivery service providers to abide by our supplier code of conduct, and ensure drivers are fairly compensated, treated with respect, follow all applicable laws and driving regulations.”

Nov. 14, 2018, post trucks leave the Amazon Logistic Center in Rheinberg, Germany. (AP Photo/Martin Meissner, file)

In the U.S., Amazon was under fire this month for how it handles its shipping subcontractors, a key factor in its logistical networks that allow it to offer same-day and even two-hour shipping. Two investigations by Buzzfeed and the New York Times found that Amazon puts great pressure on subcontractors to get results, often with awful consequences like fatal vehicle crashes.

The German Labor Ministry said the rules would stop working people from being exploited. They’re often migrants who don’t speak much German, and a crackdown in February by customs found that one out of six employment relationships had a problem. The logistics and delivery sector has been increasingly subcontracting out due to the enormous volume of packages today as e-commerce has boomed in Germany. The Ministry said that this has led to under-the-table payments and benefit fraud at the expense of employees.

The Ministry’s goal is to have a speedy parliamentary procedure so the law is enacted in time for Christmastime deliveries.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. He is reporting from Berlin on the Arthur F. Burns fellowship from the International Center for Journalists. Follow him on Twitter @ewolffmann.

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