Amazon warns 5,000 jobs at risk, may relocate warehouses
New York Mayor Zohran Mamdani backed a City Council bill on Monday that would require Amazon, FedEx and other companies to employ delivery workers directly rather than through subcontractors, opening a fight over how the city’s packages and meals reach customers’ doorsteps.
The bill, introduced earlier this year, would require warehouse operators to obtain licenses from the city. To receive a license, operators would have to meet new safety, training and employment requirements, including hiring thousands of the city’s contract couriers. If it passes, New York could become the first city to require last-mile operators to make delivery workers direct employees.
The “last mile” — the final stretch between a warehouse and a customer’s home — is typically the most expensive part of the e-commerce fulfillment process, because carrying one or two packages to individual addresses is so labor-intensive.
Mamdani said the measure would also help reduce traffic accidents. He cited a 2025 report from the New York City Comptroller that found injury-causing crashes rose in 78% of neighborhoods after last-mile facilities opened nearby.
“Corporations like Amazon build billion-dollar business models by insulating themselves from accountability through a system of exploitative subcontracting,” the mayor said in a statement.
Amazon said it would consider relocating its warehouses outside New York City if the Delivery Protection Act passed and warned the measure could put the jobs of more than 5,000 delivery workers employed by its subcontractors at risk. In testimony, the company said it has invested billions of dollars in safety programs since 2019.
“We’re committed to creating good jobs, supporting our thousands of employees and local small business partners in New York City, and providing fast, affordable delivery in a safe working environment,” the company said. Amazon also noted that its model of contracting with smaller firms that hire, train and manage fleets of workers has paved a path to business ownership for operators.
FedEx widely uses an independent-contractor model in which it contracts with a business to cover routes in a geographic area; the contractor buys its own trucks and hires its own drivers. Amazon built a similar final-mile model in which contractors also hire drivers but lease rather than own the delivery vehicles. Although those drivers aren’t direct employees of the two companies, they often wear branded uniforms or vests and drive corporate-branded vans or trucks, and they are subject to safety rules set by the companies. The contractor model has also made unionization efforts among drivers more difficult. United Parcel Service’s drivers, by contrast, are direct employees of UPS and members of the International Brotherhood of Teamsters.
The New York measure is one of several efforts by cities and states to rein in a broader trend toward outsourcing work to contractors, freelancers and gig workers. In 2019, California lawmakers passed a law that would have required Uber, Lyft and other app-based work platforms to classify their drivers as employees rather than independent contractors; the platforms then spent millions on a successful voter referendum to preserve their contractor model, though they made concessions on working conditions and pay. Last week, New Jersey sued Amazon, alleging the company illegally used its dominance over its package-delivery network to suppress wages and working conditions for thousands of delivery drivers while preventing them from organizing. Amazon said the complaint “is not grounded in fact.”
A large body of research has shown that when companies stop employing their own workers for tasks and instead push those jobs out to smaller firms or to freelancers, wages and other job protections tend to decline. Paul Osterman, a professor emeritus at MIT and author of “Disposable Workers,” a new book on the transformation of employment, called the New York bill “very innovative.” His own surveys of work arrangements indicate about 12% of U.S. workers are contractors employed by intermediaries.