When Amazon executives asked Penelope Register-Shaw to scale a new kind of delivery program, the logistics veteran saw a chance to right some wrongs.
It was 2016 and Amazon had just rolled out its first branded plane — an early sign of its nascent logistics empire. It was eager to reduce its reliance on parcel carriers such as UPS and FedEx, which had struggled to deliver amid difficult holiday shopping seasons.
A major part of that solution was a new program where Amazon would contract with small delivery providers all over the country, dubbed Delivery Service Partners.
Following early pilots in the US and UK, Register-Shaw came aboard in 2016 to improve driver attendance, better predict future performance, and solidify the background-check system — then scale it, fast. She was drawn to the opportunity it presented for relatively unskilled entrepreneurs.
“Amazon wanted to create new entrepreneurs, empower entrepreneurs, and create new capacity,” Register-Shaw said. She developed training to help DSPs succeed, and eventually Amazon started a grant program to bring more aboard. The program now has 2,500 DSPs, employing 150,000 people, a company spokesperson said.
Register-Shaw sees e-commerce as a force for social mobility. She spent 20 years at FedEx before joining Amazon, and she’s seen the status held by delivery personnel fade over time.
“I believe that part of FedEx and UPS’s success came from the couriers — that was the job you wanted,” she said. “You were well compensated. You showed up with pride.”
Now, UPS is leaning into a model where a quick-hire workforce delivers packages in their own cars. FedEx contractors have long bemoaned pay below that of their unionized UPS counterparts and alleged that the company made it impossible for delivery entrepreneurs to start with a single truck and build from there within two years. Meanwhile, the gig economy is pushing for more speed, with few benefits for the workers making it happen.
Opportunities like the DSP program were sorely needed, Register-Shaw said, but drivers weren’t seeing the economic success that can change lives.
As Amazon’s DSP program matured, new restrictions and rules limited the opportunity she had been eager to spread. Over the years, DSPs have seen the size they can reach and the profit they can garner shrink — making that $300,000 in annual revenue that Amazon once promised elusive.
“Being able to grow a company that throws off $300,000 of profit year in, year out is not going to be the reality that a lot of the DSPs face,” Register-Shaw said. She added that she has no hard feelings toward Amazon, but she does have unfinished business.
An Amazon spokesperson said: “The vast majority of Delivery Service Partners we’ve surveyed are within or above the projected profitability ranges for this program. As with any business, demand varies year by year and by season, and we work closely with DSPs to manage this variability and strive to ensure the rates we pay DSPs are adequate to support them in operating successfully and profitably.”
Register-Shaw left Amazon in May 2018 and was working on Walmart’s e-commerce transportation team when she met Dan Bourgault, a cofounder of a startup called the Frontdoor Collective. He was working on a new kind of last-mile-delivery outfit, one partially owned by the drivers themselves. She jumped at another chance to build the kind of opportunity she believed delivery work could be. The Frontdoor Collective came out of stealth mode on Thursday with more than 100 Amazon DSPs on board.
“These new entrepreneurs need another outlet for the machines that they’ve built, and that is the Frontdoor Collective,” Register-Shaw said.
For the collective, Register-Shaw is the industry cred. Her background at FedEx, Amazon, and Walmart makes her the linchpin to prove the organization’s seriousness and capability. To her, the startup is one more chance to get the labor equation in the e-commerce ecosystem right.