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Is this a theory, or proven? It makes a LOT of sense to do what Amazon is doing here. Why would you want to have a ton of depreciating vehicles on your balance

Is this a theory, or proven? It makes a LOT of sense to do what Amazon is doing here. Why would you want to have a ton of depreciating vehicles on your balance sheet? Why would you want the maintenance burden? No need to worry about all the regional differences with vehicle/transport law - you allow people who are based in that region to do it (better). One could also argue this is good for the economy, in that there are hundreds of small business popping up all over the country to become these service partners. Unions aside this feels like a smart business move so I don't understand the hate here.

mdgrech23 3y ago
it probably is good for Amazons bottom line but all of this just results in greater wealth disparity. since you're on you probably make a good living in tech but don't think that makes you immune to replacement. likewise having a bunch of people in neighboring cities who can't afford housing or groceries is going to have repercussions in your daily life as well.
rootusrootus 3y ago
Is it really a smart business move from an economic point of view? Aside from some regional differences in vehicle/transport law (which I bet are not as different as you'd expect, a lot of this is federalized), this should cost Amazon more, not less. The scale works to their advantage. Having subcontractors is strictly more expensive since there's an extra layer of profit.
- whalesalad 3y ago
  > which I bet are not as different as you'd expect, a lot of this is federalized I've lived in 5 different states over the course of my life. The operating environment varies substantially. Local ordinances vary greatly. Fuel costs. Climate (vehicles in Phoenix are not exposed to rust, salt, etc while here in Michigan they are). Local labor laws, unemployment costs, insurance costs and restrictions. It's literally completely different in every state. Businesses love to subcontract, particularly when it is outside their core competency. It's a line item on the expenses. If unions did not exist I would posit that they would still operate this way.
  - mcpackieh 3y ago
    > If unions did not exist I would posit that they would still operate this way. Yes, I think so. Furthermore, if unions were mandatory and universal, businesses would still favor subcontracting when paying for work outside their core competency.
  - jholman 3y ago
    Delivery is Amazon's core competency, IMO. By which I mean, their superior quality of delivery is the reason I buy stuff from them. The worst Amazon driver is better in every way than the best Fedex or UPS, and I'm loathe to dignify Canada Post by even mentioning them.
LatteLazy 3y ago
"outsource anything that doesn't make the beer taste better" as Jeff Bezos put it.
Buttons840 3y ago
> there are hundreds of small business popping up all over the country to become these service partners [of one company] Sounds like a monopoly to me.
- whalesalad 3y ago
  a monopoly implies domination and zero competition. where do you get that sense?
  - Buttons840 3y ago
    Well, if there are hundreds of companies doing deliveries for Amazon, then isn't "doing deliveries for Amazon" it's own industry? If hundreds of companies don't form an "industry", then I don't know what does. In the industry of "companies doing delivery for Amazon", Amazon has a dominant position. They can destroy any one company, or destroy the entire industry on a whim.
    - deleted 3y ago
      [deleted]
anigbrowl 3y ago
Why would you want to have a ton of depreciating vehicles on your balance sheet? Why would you want the maintenance burden? No need to worry about all the regional differences with vehicle/transport law [...] Why did Amazon build its own delivery fleet in the first place? Unless you were strenuously against that idea from the outset, the answer is that even with the costs it was probably cheaper than buying the service from other corporations.
itake 3y ago
> Fuel, tolls, and ongoing maintenance paid for by Amazon https://freightpartner.amazon.com/marketing/opportunity https://freightpartner.amazon.com/marketing/opportunity I think Amazon still owns the trucks and pays for their maintenance.

mdgrech23 3y ago

it probably is good for Amazons bottom line but all of this just results in greater wealth disparity. since you're on you probably make a good living in tech but don't think that makes you immune to replacement. likewise having a bunch of people in neighboring cities who can't afford housing or groceries is going to have repercussions in your daily life as well.

rootusrootus 3y ago

Is it really a smart business move from an economic point of view? Aside from some regional differences in vehicle/transport law (which I bet are not as different as you'd expect, a lot of this is federalized), this should cost Amazon more, not less. The scale works to their advantage. Having subcontractors is strictly more expensive since there's an extra layer of profit.

whalesalad 3y ago
> which I bet are not as different as you'd expect, a lot of this is federalized I've lived in 5 different states over the course of my life. The operating environment varies substantially. Local ordinances vary greatly. Fuel costs. Climate (vehicles in Phoenix are not exposed to rust, salt, etc while here in Michigan they are). Local labor laws, unemployment costs, insurance costs and restrictions. It's literally completely different in every state. Businesses love to subcontract, particularly when it is outside their core competency. It's a line item on the expenses. If unions did not exist I would posit that they would still operate this way.
- mcpackieh 3y ago
  > If unions did not exist I would posit that they would still operate this way. Yes, I think so. Furthermore, if unions were mandatory and universal, businesses would still favor subcontracting when paying for work outside their core competency.
- jholman 3y ago
  Delivery is Amazon's core competency, IMO. By which I mean, their superior quality of delivery is the reason I buy stuff from them. The worst Amazon driver is better in every way than the best Fedex or UPS, and I'm loathe to dignify Canada Post by even mentioning them.

LatteLazy 3y ago

"outsource anything that doesn't make the beer taste better" as Jeff Bezos put it.

Buttons840 3y ago

> there are hundreds of small business popping up all over the country to become these service partners [of one company] Sounds like a monopoly to me.

whalesalad 3y ago
a monopoly implies domination and zero competition. where do you get that sense?
- Buttons840 3y ago
  Well, if there are hundreds of companies doing deliveries for Amazon, then isn't "doing deliveries for Amazon" it's own industry? If hundreds of companies don't form an "industry", then I don't know what does. In the industry of "companies doing delivery for Amazon", Amazon has a dominant position. They can destroy any one company, or destroy the entire industry on a whim.
  - deleted 3y ago
    [deleted]

anigbrowl 3y ago

Why would you want to have a ton of depreciating vehicles on your balance sheet? Why would you want the maintenance burden? No need to worry about all the regional differences with vehicle/transport law [...] Why did Amazon build its own delivery fleet in the first place? Unless you were strenuously against that idea from the outset, the answer is that even with the costs it was probably cheaper than buying the service from other corporations.

itake 3y ago

> Fuel, tolls, and ongoing maintenance paid for by Amazon https://freightpartner.amazon.com/marketing/opportunity https://freightpartner.amazon.com/marketing/opportunity I think Amazon still owns the trucks and pays for their maintenance.