Nandini Roy Choudhury, writer
Brief news
- The Attorney General of Washington, D.C. has filed a lawsuit against Amazon for allegedly denying high-speed delivery to residents in two historically underserved ZIP codes while charging full Prime membership fees.
- Amazon claims safety concerns for delivery drivers led to the exclusion, while the lawsuit argues this practice violates consumer protection laws.
- The lawsuit highlights significant disparities in delivery times for affected residents compared to others in the district, raising issues of discrimination.
Detailed news
On Wednesday, the Attorney General of Washington, District of Columbia, filed a lawsuit against Amazon, alleging that the firm had secretly denied residents of particular ZIP codes in the nation’s capital access to Prime’s high-speed delivery service.
A complaint filed by Attorney General Brian Schwalb asserts that, beginning in 2022, Amazon has “secretly excluded” two ZIP codes in the District of Columbia that have been “historically underserved” from its fast delivery service, while at the same time charging Prime members who live in those areas the full subscription price. Benefits such as access to streaming video and two-day shipping are included in the Amazon Prime membership program, which costs $139 a year and includes membership.
According to Schwalb, who issued a statement, “Amazon is charging tens of thousands of hard-working residents of Ward 7 and 8 for an expedited delivery service that it promises but does not provide.” “Although Amazon has the authority to make changes to its business operations, the company cannot secretly decide that a dollar in one zip code is worth less than a dollar in another dollar in another zip code.”
A spokesperson for Amazon named Steve Kelly issued a statement in which he stated that the assertion that the company’s business practices are “discriminatory or deceptive” is “classically false.”
According to a statement released by Kelly, “We want to be able to deliver as quickly as we possibly can to every zip code across the country; however, at the same time, we must put the safety of delivery drivers first.” There have been specific and targeted crimes committed against drivers who deliver products for Amazon in the zip codes that are in question. For the sole purpose of ensuring the well-being of our drivers, we made the conscious decision to make adjustments to our operations, which included modifying our delivery routes and timings.
According to Kelly, Amazon has made an offer to collaborate with the office of the Attorney General on initiatives “to reduce crime and improve safety in these areas.”
According to the lawsuit, Amazon allegedly ceased using its own delivery vehicles to carry products in the ZIP codes 20019 and 20020 in June 2022 due to worries over the safety of its drivers. Based on the complaint that was submitted to the District of Columbia Superior Court, it was said that the corporation relied on third-party delivery services such as UPS and the United States Postal Service to make deliveries rather than utilizing its own internal delivery network.
Despite paying the same membership fee for Prime, residents of those ZIP codes saw “significantly longer delivery times than their neighbors in other District ZIP codes,” according to the lawsuit. This was the result of the choice that was made.
According to the information provided by the AG, prior to the implementation of the modification, more than 72 percent of Prime packages contained inside the two ZIP codes were delivered within two days of the time of checkout. In the aftermath of the relocation, that percentage fell to as low as 24 percent, but the percentage of deliveries made within two days across the district jumped to 74 percent.
Previously, Amazon has been subjected to allegations of inequalities inside its Prime program. After an analysis conducted by Bloomberg revealed that black people were “about half as likely” to be qualified for same-day delivery as white residents, the firm said in 2016 that it would increase access to same-day delivery in areas such as Atlanta, Chicago, Dallas, and Washington.
According to data from the 2022 Census that was derived from the American Community Survey, the ZIP codes that are included in Schwalb’s complaint are located in regions that have significant Black populations.
Additionally, in June of 2023, the Federal Trade Commission filed a lawsuit against Amazon, accusing the corporation of using so-called dark patterns, which are deceptive design strategies that are intended to guide users toward a particular decision, to trick customers into signing up for Prime and “sabotaging” their attempts to cancel their subscriptions. A statement made by Amazon stated that the complaint was “false on the facts and unlawful.” The trial hearing is scheduled to take place in June of 2025.
Scwalb’s complaint states that Amazon did not share the information about the delivery exclusion with Prime members who were located in the area. It is said in the lawsuit that when customers in the affected ZIP codes complained to Amazon about slower delivery speeds, the corporation responded by stating that the issue was caused by factors that were beyond its control.
In the complaint, Amazon is accused of breaking the consumer protection regulations that are in place in the district. In addition, it requests that the court “put an end to Amazon’s deceptive conduct,” in addition to requesting that damages and penalties be awarded.
Amazon uses a combination of its own contracted delivery companies, which are typically indicated by Amazon-branded cargo vans, as well as carriers such as the United States Postal Service, United Parcel Service, and FedEx, as well as a network of gig workers who make deliveries from their own vehicles as part of its Flex program. This allows Amazon to deliver packages to the doorsteps of its customers.
Amazon’s in-house logistics army has been quickly expanding over the past few years as the company strives to reduce the amount of time it takes to deliver packages from two days to one day or even a few hours. More than five billion products were delivered inside a single day, according to the firm, which said in July that it had achieved its “fastest Prime delivery speeds ever” during the first half of the year.
The fact that Amazon relies on its own labor has allowed the company to exert a greater degree of control over its delivery operations.
Specifically, Schwalb cites an internal corporate policy that states Amazon has the right to opt to ban particular locations from being supplied by its in-house delivery network in the event that a driver is subjected to “violence, intimidation, or harassment.” Schwalb’s complaint is based on this policy. The delivery of items in places that are not covered by the company’s services is handled by either UPS or the United States Postal Service.
Source : CNBC news
