Amazon Is Boosting Pay for Contracted Delivery Drivers—Starting as Soon as Next Month The company is raising the average hourly rate for delivery drivers to $20.50 by mid-October.

By Madeline Garfinkle

Key Takeaways

  • Amazon announced plans to increase compensation for contracted drivers with a $440 million investment.
  • In June, 84 DSP drivers unionized

Opinions expressed by Entrepreneur contributors are their own.

Some delivery drivers are getting a pay bump soon.

On Tuesday, Amazon announced plans to increase compensation for contracted drivers with a $440 million investment in its third-party delivery program this year, with the goal of raising the average hourly rate for delivery drivers to $20.50 by mid-October.

In 2018, Amazon launched the Amazon Delivery Service Partner (DSP) program, which gives entrepreneurs access to Amazon's tools and resources to run delivery businesses. Since its launch five years ago, the company has invested over $8.9 billion in the program, created 279,000 driving jobs, and generated $45 billion in revenue.

"This is going directly to DSPs, so that they can offer competitive pay to their employees, and build and retain great teams," Beryl Tomay, vice president of last-mile delivery and technology at Amazon, told CNBC.

While DSP driver wage varies by state, according to Indeed, the current average pay for a DSP driver in the U.S. is $19.28 an hour.

Amazon delivery trucks leave the Amazon warehouse to make delivers as Amazon drivers and dispatchers continue to strike at the company's Palmdale, California, warehouse and delivery center on July 25, 2023. Robyn Beck/AFP | Getty Images.

Along with the wage increases, the company announced that it is expanding its Next Mile education program, offering eligible DSPs access to 2,000 academic programs with tuition coverage of up to $5,250 per year, and launching the "Together, We Give" program, enabling DSPs in the U.S. and Canada to access grants of up to $5,000 for charitable donations to local nonprofits.

The announcement comes in the wake of the first-ever delivery driver strike that began in Southern California in June after 84 Amazon DSP drivers unionized under the International Brotherhood of Teamsters. The strike started in Palmdale, Calif., and has since expanded the picket lines across the state to the Bay Area and Hollister.

It is unclear if the strike, still ongoing, will end with Amazon's new initiatives.

Related: Want to Be a UPS Delivery Driver? The 'Hottest' Job in the Country Only Has 17 Positions Open.

Madeline Garfinkle

News Writer

Madeline Garfinkle is a News Writer at Entrepreneur.com. She is a graduate from Syracuse University, and received an MFA from Columbia University. 

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Business News

AI Is Going to 'Replace Everybody' in Several Fields, According to the 'Godfather of AI.' Here's Who He Says Should Be 'Terrified.'

Geoffrey Hinton, called the "Godfather of AI" due to his pioneering work on AI, says some fields face a heavier risk of replacement due to automation.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Leadership

How to Know When It's Time to Sell Your Business — Before It's Too Late

It's not always simple to recognize when it's time to move on. Here are three signs to look for to help you make the decision.

Business News

Meta Is Reportedly Planning to Release New AI Smart Glasses With Oakley and Prada

The Oakley Meta AI glasses are expected to cost more than the Ray-Ban Metas.

Taxes

Why New Tax Rules Could Be a Game Changer for Your Business

With the One Big Beautiful Bill Act making its way through Congress, entrepreneurs need to be ready for significant tax policy changes.

Business News

Duracell Accuses Energizer of 'Blatantly False Advertising' in Latest Legal Battle

Duracell and Energizer have been suing each other over advertising claims for years.