Amazon faces New York delivery worker overhaul

Amazon is facing a direct challenge to its delivery model in New York City after Mayor Zohran Mamdani threw his support behind legislation that would require operators of last-mile facilities to employ delivery and warehouse workers directly rather than relying on networks of subcontractors.

The Delivery Protection Act, sponsored by City Council member Tiffany L. Cabán, would impose a licensing regime on certain warehouses and distribution centres handling the final stage of deliveries to consumers. It would also introduce safety, training and employment standards and give city authorities and workers additional enforcement powers. The proposal remains before the Council’s Committee on Consumer and Worker Protection after an April hearing.

Mamdani’s endorsement on Monday significantly raises the political stakes for Amazon, which relies on more than 40 local Delivery Service Partners, or DSPs, to move packages through the city. Those businesses employ more than 5,000 people. Amazon says forcing it to abandon those arrangements could lead it to move some delivery facilities outside the five boroughs, increasing costs and slowing deliveries.

The legislation would require companies controlling last-mile facilities to employ workers performing defined “core services”, including sorting goods inside warehouses and transporting packages to customers. Operators would need individual licences for each facility, with a $500 annual licensing fee and a two-year licence term. Applicants would also have to disclose findings that they violated workplace safety, road safety, environmental or worker-protection laws.

The battle has become a test of Mamdani’s wider effort to strengthen protections for workers in businesses dominated by large technology and logistics companies. His administration argues that Amazon exercises extensive influence over workloads, routes, quotas and other working conditions while allowing subcontractors to remain the formal employers of drivers. Amazon disputes the characterisation and says DSP owners independently control important decisions including hiring, fleet management and staffing.

Amazon has warned that dismantling the DSP structure would threaten small delivery businesses built around its network. The company says approximately a quarter of its New York delivery partners are owned by Black or Hispanic entrepreneurs, while about 10% are veteran-owned. It maintains that the model gives workers a choice among local employers rather than concentrating thousands of drivers under one corporate employer.

Opponents have also raised the possibility that higher operating costs would reach consumers. Estimates circulated during the debate have suggested that changes to delivery networks, including shifting facilities beyond city limits, could add hundreds of dollars a year to household delivery costs. Such projections depend heavily on how companies restructure operations if the measure becomes law and have become a major point of contention between business groups and labour advocates.

Supporters counter that the existing model separates corporate control from legal responsibility. The Teamsters, which has organised Amazon workers and delivery drivers, is pressing the Council to approve the measure and describes New York as a potential model for similar campaigns elsewhere. The union argues that requiring direct employment would make it harder for large delivery companies to terminate contractors or reorganise their networks when workers seek collective representation.

The dispute also extends beyond employment status to street safety. At least 18 large last-mile facilities opened across New York City from 2017 onwards, including 11 since 2020. City officials have linked the growth of these warehouses to higher vehicle traffic in surrounding neighbourhoods, citing increases in injury-causing crashes around several distribution centres. Amazon says its New York serious-crash rate improved sharply between 2024 and 2025 and points to driver training, monitoring technology and more than 800 electric cargo bikes operating in Manhattan and Brooklyn.

The confrontation fits a broader pattern of Mamdani using municipal powers to challenge major corporations over workplace and consumer practices. His administration recovered more than $9 million in unpaid vehicle-idling fines from Amazon in May and has tightened enforcement of delivery-worker protections. New York’s roughly 70,000 app-based food and grocery delivery workers are also covered by minimum-pay and tipping rules strengthened this year.