Amazon (NASDAQ:AMZN) is planning to increase wages for its contract drivers, according to CNBC. The move is part of the eCommerce major’s $440 million investment in its third-party delivery program.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Introduced in 2018, Amazon’s Delivery Service Partner (DSP) program includes nearly 279,000 drivers. These delivery associates execute last-mile delivery for the company. While DSPs have the final say in wages and incentives, Amazon has a minimum pay standard in place, and the wage increase is expected to help DSPs offer competitive pay to their employees.
The hiked wages are expected to roll out in mid-October, and Amazon expects that a delivery associate will earn around $20.50 an hour alongside benefits.
The company invested $8.9 billion in the DSP program so far, which plays a key role in its logistics operations. Furthermore, the wage hikes are also a response to the unionization push among its delivery workforce from the International Brotherhood of Teamsters.
The company continues to enhance its logistics capabilities and offerings. Yesterday, it announced a completely automated set of supply chain services, Supply Chain by Amazon, to help sellers efficiently move products from their manufacturers to customers globally. The end-to-end solution promises hassle-free shipping and delivery of products for sellers.
Overall, the Street has a consensus price target of $175.63 on Amazon, accompanied by a Strong Buy consensus rating. Shares of the company have jumped nearly 64% for the year so far.
Read full Disclosure
