Mamdani-backed Delivery Protection Act will Raise Costs and Kill Jobs

New York City is about to get more expensive if the Delivery Protection Act passes. Introduced by City Council Member Tiffany Cabán, the proposed legislation would require companies such as Amazon and FedEx to hire last-mile delivery drivers directly, rather than subcontracting to local businesses. On August 10^th, New York City Mayor Zohran Mamdani came out in support of the legislation, meaning that if it passed the city council, it could easily be signed into law. This would make New York City even more unaffordable and kill thousands of jobs in the city, especially those held by lower-income individuals.  

The justifications for this bill do not match the data. Mayor Mamdani claims that requiring companies like Amazon to hire these last-mile drivers will increase workplace safety by making big corporations liable for injuries. However, this misunderstands the current conditions. According to the New York City Comptroller’s Office, injury rates for last-mile facilities were 8.3 per 100 employees, which is in line with the rate for all couriers. It is no more dangerous to be a last-mile delivery driver than to be a general courier, calling the legislation’s benefits into question. Additionally, these companies have an incentive to keep their subcontractors safe. Fewer workplace injuries would lead to lower insurance costs, reduced turnover, and less equipment damage, saving the company money. Companies recognize this: Amazon has invested over $12 billion in safety features for its vehicles, resulting in a 48% decrease in accident rates since 2020. Additionally, companies like Amazon already mandate that their subcontractors offer health coverage and paid time off, with some going further than that by including retirement accounts and tuition reimbursement. Putting this legislation in place is unlikely to be the deciding factor in making conditions safer for drivers.  

Implementing this bill will worsen economic conditions in New York City. According to a report by AKRF, consumers would have to pay over $400 more annually for their goods. This is because companies would likely leave New York City to avoid these regulations. For example, Amazon announced plans to relocate its delivery services to New Jersey. By making deliveries farther away, drivers must travel more, limiting the amount of goods they can ship and increasing input costs such as truck gas. Rather than absorbing the costs, companies will pass them on to consumers in the form of higher prices. At a time when the cost of living in the city is more than 120% higher than the national average, lawmakers should focus on making the city more affordable. Rather, they are interested in doing the opposite.  

With higher costs and forced hiring, existing independent firms and delivery drivers will suffer. Zooming in on Amazon, they subcontract through their Delivery Service Partner model, allowing third-party independent businesses to operate a fleet of vehicles to deliver packages. These subcontractors are usually small businesses that will be decimated if the Delivery Protection Act passes. This will disproportionately hurt groups that Mayor Mamdani claims to care about, as 25% of the businesses are operated by black or Hispanic owners and 10% are veteran-owned. The Delivery Protection Act would also eliminate an estimated 10,000 jobs, with no guarantees that those retained by companies like Amazon would have the same routes and benefits.  

If the act would not benefit drivers, who would it benefit? The answer is the Teamsters union, which has backed this bill. Getting rid of independent, non-unionized drivers and forcing them to work for Amazon allows the Teamsters to get more dues-paying members, further enriching leadership. This is classic rent-seeking behavior that pushes up costs for consumers to fund politically connected, entrenched organizations.  

Companies like Amazon have worked wonders in making goods more affordable and accessible to more people than ever before. However, the Delivery Protection Act would only increase prices and hurt the workers that Mayor Mamdani and the rest of the City Council claim they care about. At a time when New York City is becoming increasingly unaffordable, policymakers need to focus on applying sound economic principles to reduce costs for residents. Ultimately, this law stands to work against that.