Zohran Mamdani is Turning His Fire on Amazon

Dow Jones
Yesterday

The progressive agenda of New York City's socialist mayor is bringing him head-to-head with Amazon.com.

Zohran Mamdani pulled off a historic victory in New York City's November mayoral race running on an antiestablishment, pro-worker platform. He campaigned on a rent freeze, free buses and city-owned grocery stores and proposed raising taxes on wealthy residents and companies.

Since taking office, Mamdani has made a number of moves directed at the retail-and-cloud-computing giant. Earlier this month, he backed the Delivery Protection Act, which would force warehouse operators such as Amazon to obtain licenses from the city by adhering to new safety, training and employment requirements. It would also require Amazon to directly hire couriers who are currently employed by smaller firms that deliver its packages. Amazon has said it would consider relocating its warehouses if it passes.

Mamdani announced the collection of more than $9 million in idling fines from Amazon delivery vehicles. At the time, Department of Environmental Protection Commissioner Lisa F. Garcia called Amazon "among the top worst idling offenders in the city." And the mayor sent cease-and-desist orders to online retailers, including Amazon, that the city said were selling illegal e-bikes.

"We're working to bring down the cost of things, and we're also laser focused on increasing what workers get to keep in their pockets," said Julie Su, New York's deputy mayor for economic justice. "We are going to send a clear message to companies who break the law that New Yorkers deserve better."

Amazon said it requires e-bikes sold in its store to meet applicable safety standards. The company also said it has worked with city officials to resolve idling fines, adding that many of them didn't reach Amazon's Delivery Service Partners, independent companies that deliver packages, because of gaps in how violations were tracked.

At the heart of the showdown between Mamdani and Amazon is the Delivery Protection Act, which Amazon says would put the jobs of more than 5,000 delivery workers at risk and land heavily on the small businesses that deliver its packages. The legislation was introduced by New York City Council member Tiffany Cabán. Announcing his support for the bill, which has broad support on the council, Mamdani said that it would help protect delivery workers and ensure companies are held accountable for their business practices.

Cabán said the progressive caucus is targeting "any entity that is exploiting New Yorkers and making them less safe...If you fall under that category, then yeah, there's gonna be an arrow pointed at you," she said.

The Delivery Protection Act isn't the first dust-up between Amazon and progressive politicians in New York. In 2019, Amazon abandoned its $2.5 billion plan to build a New York City headquarters after political opposition to subsidies it was set to receive.

Alexandria Ocasio-Cortez, a critic of the project, cheered Amazon's announcement that it was pulling out in a social-media post: "Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon's corporate greed, its worker exploitation, and the power of the richest man in the world," she wrote, referencing Amazon founder Jeff Bezos.

Andrew Cuomo, New York's governor at the time, was among those who called Amazon's retreat a loss for the city, saying "A small group of politicians put their own narrow political interests above their community."

In the battle over the Delivery Protection Act, Amazon has contributed around $5 million to the Five Borough Jobs Campaign, an organization fighting the legislation, according to public records. Helping to lead the charge is Jessica Schumer, who has worked for Amazon for years and is the daughter of Senate Minority Leader Chuck Schumer.

A study by AKRF, funded by the Five Borough Jobs Campaign, found that if the Delivery Protection Act passes, prices could go up by $664 a year per household.

"It's a responsibility for every council member to come and see operations firsthand as they're considering this bill or any other version of it," said Amazon spokeswoman Kelly Nantel. "We're not looking to leave New York."

Patrick Penfield, professor of supply chain practice at Syracuse University, said the Delivery Protection Act would increase Amazon's costs. "Their last-mile delivery model is based on third-party subcontractors, and that's how they've been able to deliver things cheaply within New York City," he said.

José Huerta, a delivery driver, works for a delivery service partner out of Amazon's DBK1 facility in Queens, where he makes $23.75 an hour delivering between 250 to 290 packages a day, four days a week, he said.

Huerta, who is a member of the International Brotherhood of Teamsters, is supporting the bill in part because he said drivers will have more leverage to seek better benefits if they are more directly tied to Amazon.

Owners who run some of the delivery companies that work with Amazon say the bill threatens small businesses.

"It takes the ability for small businesses, small mom-and-pop businesses to operate away," said Kris Basmagy, the owner and founder of DashWave Delivery. "It gives the keys basically to the large corporations in the city to basically employ everybody."

Political consultant Hank Sheinkopf said the "attack on Amazon" by progressive politicians isn't new, but Mamdani's actions around Amazon speak to his political aspirations.

"It's smart for him because he is a national figure. He has national ambitions," Sheinkopf said. "What better way to start the second phase of the revolution, but to take on the most recognizable delivery entity in the world?"

 

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Most Discussed

  1. 1
     
     
     
     
  2. 2
     
     
     
     
  3. 3
     
     
     
     
  4. 4
     
     
     
     
  5. 5
     
     
     
     
  6. 6
     
     
     
     
  7. 7
     
     
     
     
  8. 8
     
     
     
     
  9. 9
     
     
     
     
  10. 10