Running New York’s delivery drivers at full union cost would take about four days of Amazon’s North American operating income. The company is spending more to stop the bill than it spent lobbying for HQ2, because the five boroughs are not the number it is defending.
Mayor Zohran Mamdani endorsed the Delivery Protection Act on Monday, a New York City Council bill that would force Amazon, FedEx and other large delivery operators to employ their couriers instead of renting them from subcontractors. Amazon has told the Council it might move warehouses out of the city. Strip out the politics and the fight is about one number: 35 co-sponsors in one council, against a subcontracting structure that covers roughly 280,000 US drivers and separates them into thousands of legally distinct employers. New York is under 2% of the exposure. The template is the rest.
A driver working out of Amazon’s DBK4 station in Maspeth, Queens loads a van Amazon leases, wears a vest with Amazon’s logo, follows a route Amazon’s software built, and gets graded each week on a scorecard Amazon writes. On paper, that driver works for a company with 25 to 80 employees whose only customer is Amazon. Cabán’s bill would delete the paper.
What Happened
Mamdani threw his weight behind Introduction 518, sponsored by Council Member Tiffany Cabán, in a video released Monday, August 10. The mayor’s office described the target as a “system of exploitative subcontracting.”
The bill would require operators of last-mile warehouses and storage facilities in New York City to hold a license from the Department of Consumer and Worker Protection. Licensees would have to meet safety, training and employment standards, and would have to directly employ the workers performing core services such as delivery. DCWP could suspend a license over a pattern or practice of violations. An employee retention clause would require the operator to offer jobs to the subcontracted workers it displaces.
Amazon told the Council that dismantling its Delivery Service Partner network would wipe out more than 40 small businesses in the city employing roughly 5,000 people, who earn an average of nearly $24 an hour. In written testimony it raised the “potential for relocating operations and delivery facilities outside of New York City.” The company also said its serious-crash rate involving city delivery subcontractors improved by more than a third between 2024 and 2025, on the back of billions spent on safety programs since 2019.
The 2026 version carries 35 co-sponsors out of 51 council members. Council Speaker Julie Menin is not one of them, though she co-sponsored the 2025 version, which collected 41 names and died without a floor vote.
The Backstory
Amazon built the DSP program in 2018 to solve a problem UPS and FedEx had already solved in opposite ways. UPS employs its drivers and pays the Teamsters. FedEx contracts routes to independent businesses that buy their own trucks. Amazon took the FedEx structure and tightened it: the contractor hires the drivers, leases the vans from Amazon’s program, runs Amazon’s routing software, and lives or dies by a weekly performance grade that determines how many routes it gets next week.
The program now covers about 4,500 owners worldwide. Amazon says it has generated $58 billion in revenue for those businesses and created 390,000 driving jobs, and that it has put $16.7 billion into rate cards, safety and services over seven years, including $1.9 billion in 2025 aimed at lifting driver pay toward a national average near $23 an hour. Amazon tells prospective owners they can earn $75,000 to $300,000 a year.
The Teamsters have spent three years attacking the seam. In April 2023, a Palmdale, California contractor called Battle Tested Strategies recognized the union. Amazon cut its routes weeks later and ended the contract. Four Star Express in Skokie, Illinois voted to unionize, struck, and lost its contract. Drivers at three subcontractors working out of DBK4 in Queens went to card check in September 2024. Amazon never recognized them, and more than 100 drivers there lost their jobs in August 2025.
Then the federal case closed. NLRB Region 31 had found in 2024 that Amazon was a joint employer of the Palmdale drivers, a finding that would have forced Amazon to bargain. In June 2026 an administrative law judge approved a settlement between Amazon and the NLRB General Counsel that ends the matter with no joint-employer ruling. About 84 workers get two weeks of pay. FreightWaves put the likely bill near $250,000. The Teamsters objected. So did the contractor’s owner.
Two months later, New Jersey Attorney General Jennifer Davenport sued Amazon in federal court, alleging monopsony power over the market for delivery driver labor under both Sherman Act sections and state antitrust law. Her complaint says Amazon stops its contractors from hiring each other’s drivers and from competing on pay. Amazon called the complaint ungrounded in fact.
The Plan
Read the three fights together and the sequence is clear. Federal labor law got cheap for Amazon in June. Antitrust and municipal licensing got expensive in August.
Cities cannot write labor law. New York City can write conditions on the right to operate a building inside its borders, and that is what Cabán drafted. A license is not a lawsuit. Amazon cannot settle a licensing standard for two weeks of back pay, and DCWP does not need to prove joint employment to pull a permit. The same commissioner’s office that recovered $104 million in additional tips from food delivery apps since January now gets jurisdiction over the warehouses.
Comptroller Brad Lander handed the sponsors their evidence in November 2025. His report, Fast Shipping, Slow Justice, counted 18 large last-mile facilities opened in the city since 2017, 11 of them since 2020, of which 12 belong to Amazon. Injury-causing crashes rose in 78% of the areas around them after opening, with injuries inside a half-mile radius up 16% on average and truck-involved injury crashes up 137%. Near two Maspeth warehouses, crashes rose 53% and 48%. Between 2022 and 2024, 38 of 50 city facilities reported more than 2,000 injuries to OSHA. Daily package deliveries across the city went from 1.8 million before the pandemic to 2.5 million in 2024.
The safety findings are the license’s legal foundation. The employment mandate is what the Teamsters came for.
The Business Model Angle
Subcontracting does three jobs for Amazon, and only one of them is wage arbitrage.
The first is price. An hour of last-mile labor costs Amazon about $24 in New York through a contractor. A senior UPS driver costs UPS around $65 an hour once healthcare and benefits load on top of the $49 top wage negotiated in 2023, according to a parcel contract comparison by LJM cited by FreightWaves. FedEx contractors sit at $35 to $39. Gig fleets run at $15 or less.
The second is liability. When a van hits a cyclist in Red Hook, the defendant is a 40-van company, not a $2 trillion one.
The third job is the one Amazon is paying to protect. Splitting 280,000 drivers across roughly 4,500 employers means a union has to win 4,500 elections, and Amazon can cancel any employer that loses one. Palmdale and Skokie proved the mechanism works. Direct employment collapses that structure into a single bargaining unit per market, and the entity across the table is Amazon.
Now price the two outcomes. Take Amazon’s own New York figures, 5,000 drivers at nearly $24 an hour, and assume every one of them ends up at UPS union economics. At 2,000 hours a year each, the $41 hourly gap costs $410 million annually. Amazon’s North America segment earned $9.1 billion of operating income in the June quarter and $8.3 billion in the March quarter, an annual run rate around $34.7 billion, or roughly $95 million a day. New York’s worst case is about four days.
Apply the same arithmetic to 280,000 US contractor drivers and the bill is $23 billion a year, two thirds of North American operating profit. That is the ratio Jessica Schumer, Amazon’s head of New York policy since January and one of four company lobbyists registered at the Council, has been hired to defend. Sources told The American Prospect the company is outspending its own HQ2 campaign on a five-borough ordinance. Nobody spends HQ2 money to protect four days of segment income.
The comparison Amazon would rather run is California. Uber, Lyft, DoorDash and Instacart spent $205 million to pass Proposition 22 in 2020 and overturn a state law reclassifying their drivers, against $16 million from labor. That option does not exist here. New York gives citizens no power to initiate statutes or veto referendums, and never has. Every measure on a New York ballot gets there because the legislature put it there. Amazon can litigate, lobby the Speaker, or leave. It cannot buy the law back.
The Risk
Menin’s missing signature is the live variable. Speakers control what reaches the floor, and 35 co-sponsors do not schedule a vote. She backed the 2025 version and did not sign the 2026 one. The Prospect reports Amazon’s pressure has kept the Council still. Amazon also brought DSP workers to the April committee hearing to testify against the bill, covering their travel with $70 in ride vouchers, per Streetsblog.
The relocation threat carries more weight than city officials admit. The bill reaches facilities inside New York City. A delivery station in Yonkers or across the Hudson still serves Manhattan, and the city keeps the trucks while losing the jobs, the tax base and the leverage. Stem miles and cost per package would rise, which is why Amazon has not moved already. That does not make the threat empty.
The strongest argument against my own reading: this bill mandates an employer, not a contract. Amazon can employ 5,000 New Yorkers at $24 an hour and change nothing about pay. The $41 gap in the chart closes only if those workers then organize and win, which Amazon has beaten before at Bessemer, Staten Island and Palmdale. What the bill buys the Teamsters is a shot, not a raise.
Automation cuts the other way too. Amazon told investors in July it will more than double its fleet of robotic arms this year, and shipping costs already rose 19% in the June quarter on fuel and line-haul rates while the company kept saying it is lowering cost to serve. Turning delivery labor into a fixed cost with an organizing risk attached raises the return on removing the driver.
The DSP owners have the fairest complaint. Forty-odd New York small businesses built around a single customer would lose that customer by statute. The retention clause protects the drivers. Nothing protects the owners Amazon recruited with a $75,000 to $300,000 pitch.
Quick Questions
Would the bill make Amazon drivers union members? No. It would make them Amazon employees. Union representation would still require an organizing campaign and an election, with Amazon as the direct employer rather than a contractor it can replace.
Has any US city done this before? No. If it passes, New York would be the first to require last-mile operators to employ their couriers. California tried the state version in 2019 with AB 5, and Uber and its peers overturned it at the ballot box in 2020.
Why is Amazon still exposed after winning at the NLRB? The June settlement closed the federal joint-employer question without a ruling. It does not touch a city licensing regime, New Jersey’s antitrust claim, or state misclassification suits, which run on separate legal tests.
What does this cost Amazon if it passes? In New York, somewhere between a rounding error and about $410 million a year, depending on whether the newly hired drivers organize. The company’s exposure is national and arrives only if other cities copy the text.
Does FedEx face the same problem? Yes, on the licensing and employment mandate, since FedEx runs contracted routes in the city. Its contractor drivers already cost $35 to $39 an hour, so the wage step is smaller.
The Business Model Analyst Take
Amazon spent seven years and $16.7 billion building a delivery network it does not employ, and the accounting reason was never the wage line. Paying UPS rates in New York would cost the company less than a week of North American profit. The structure earns its keep by keeping 280,000 drivers in 4,500 legal boxes, so that the cost of organizing them is paid one box at a time and Amazon holds the power to close any box that succeeds.
Cabán’s bill attacks the boxes rather than the wage, which is why a municipal ordinance drew more lobbying money than a $2 billion headquarters deal. Watch two things. First, whether Menin puts Introduction 518 on the calendar, because 35 co-sponsors mean nothing without a vote. Second, whether any other city council picks up the text. The New York number is four days. The copy-paste number is two thirds of the segment.
