Amazon is closing its gig economy delivery service in Germany

AMAZON.COM is shuttering its gig economy delivery service in Germany.

The company's Flex programme, which began in the US in 2015 before expanding to Germany 2 years later, pays drivers to ferry packages in their own vehicles from Amazon warehouses to customers' homes.

"We regularly evaluate our various programmes and have made the difficult decision to discontinue the Amazon Flex programme in Germany at this time," a spokesperson for the Seattle-based company said in an emailed statement. "We are actively supporting former Amazon Flex delivery partners to find other opportunities across the hundreds of roles and opportunities across Amazon's operations in Germany."

Amazon declined to say why it decided to halt the service in Germany, its second largest market after the US. But in recent years, the company has built a more formal delivery network, relying on small startups beholden to Amazon, which the company calls Delivery Service Partners or DSPs.

Amazon is offering some Flex drivers a one-time payment equal to 4 weeks' pay, according to communications reviewed by Bloomberg. The notices also encourage them to join one of hundreds of German DSPs. That network is capable of absorbing "the very small portion of deliveries that Amazon Flex has been making" while meeting delivery pledges, the company said on Tuesday (Jun 7).

Amazon has 67 delivery stations in Germany, according to MWPVL International, a logistics consulting firm. At the beginning of the pandemic, there were 10 such facilities, which are each typically served by several DSPs. The company doubled its warehouse capacity during the pandemic, when virus fears and stay-at-home orders supercharged demand, and is now seeking to sublease some space.

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Amazon sales in Germany totalled US$37 billion in 2021, up 26 per cent from the prior year. BLOOMBERG