Amazon joins the on-demand economy, using independent contractors for deliveries

Amazon Flex, which the company describes as its newest delivery innovation, allows individuals to be their own bosses while earning up to US$25 per hour or more delivering Prime Now orders, wrote company spokeswoman, Kelly Cheeseman, in an email on Monday.

Prime Now uses an app to offer charged one-hour delivery and free two-hour delivery on items from Amazon and local stores.

Amazon Flex is currently active in the company's home turf Seattle and is coming soon to other cities where the retailer offers Prime Now, Cheeseman added.

The company said on its website that Amazon Flex will be available soon in New York, Baltimore, Miami, Dallas, Austin, Chicago, Indianapolis, Atlanta and Portland.

The Amazon Flex program uses an app that allows workers to sign up for shifts to deliver the packages, according to a report in The Wall Street Journal.

The company said on the its website that it is looking for drivers who are at least 21 years old and have a car and a valid driver’s license. Drivers will also need an Android phone and have to pass a background check. The drivers can choose to work for available blocks of 2, 4, or 8 hours in the day or set themselves as available for up to 12 hours a day.

The on-demand model has been used by a large number of startups both as a model to attract workers who can decide to work whenever they want to, and also in some cases to avoid paying the workers a variety of benefits that they would have paid their employees, possibly including reimbursement for vehicle expenses.

Ride-hailing company Uber Technologies is one of a number  that have been sued in court in lawsuits that argue that the workers should be classified as employees and not independent contractors. Postmates, Shyp, and Washio were among other companies also sued by workers. Uber received a setback when a District Court in California agreed this month to the workers' request for class certification.

The California Labor Commission earlier ruled in June that a driver of Uber was an employee and not a contractor, when driving for the company, and was hence entitled to reimbursement on certain expenses. Uber said it had appealed the decision.

Some of the so-called on-demand companies changed their practices or shut down operations in the wake of the demands for reclassification of workers. Shyp, an app-based shipping service, said in July its couriers would now be considered as employees, while food-delivery startup Sprig said last month it was changing the status of its delivery drivers from contractors to employees.

Amazon does not appear to be worried about the classification issue. The program's  "participants desire to be their own boss and to have a flexible schedule while earning up to $25 per hour or more as an independent service provider," Cheeseman wrote. "For those who want something more traditional, we are hiring thousands and thousands of people across the company in full-time roles."