Amazon Launches Branded Delivery Service Aimed at Small Businesses
*By Justin Chermol*
Amazon took another jab at FedEx and UPS Thursday, soliciting the help of entrepreneurs to help build out its own "last mile" delivery service.
Under its new Delivery Service Partners initiative, the company will offer incentives to small businesses to form their own delivery companies, deploying up to 40 Prime-branded vans and employing up to 100 drivers.
This is not the first delivery program unleashed by Amazon. The company, which spent $21.7 billion on shipping last year, has also rolled out “Flex” and “Shipped With Amazon.” But the "last mile" issue is a tricky one for online retailers. Getting products from warehouse to warehouse and to customers' general metro areas is much less complicated and expensive than moving them door to door. Experts say solving this issue will be key for the industry.
"Amazon needs to figure out a solution to this problem, because it would like to be totally self-reliant and not deal with third parties," said John Divine, Senior Investing Reporter at U.S. News & World Report. "It will require some risk-takers on the parts of the entrepreneurs."
As for Amazon's latest effort, the company says those that are accepted into the Delivery Service Partners program could potentially start a business with less than a $10,000 investment. The entrepreneurs will have to recruit and hire drivers. But Amazon will provide uniforms and offer plans to cover, at least partly, things like insurance and fuel costs.
But that wasn't the only news out of Amazon on Thursday -- the company also [announced it was acquiring online pharmacy company PillPack](https://cheddar.com/videos/amazon-to-buy-online-pharmacy-pillpack). That sent shares of Walgreens and CVS plunging.
Shares of Walgreens and CVS dropped Thursday morning after Amazon said it's buying online pharmacy start-up PillPack in a deal reportedly worth a little less than $1 billion.
The move was the latest indication of the e-commerce giant's intent to get into the prescription drug business. Boston-based PillPack organizes delivery of medications for patients, dividing doses by when they should be taken and automatically refilling and renewing orders.
"Part of the execution that PillPack is supposed to be bringing here is dealing with insurance and copays and refills," said John Divine, Senior Investing Reporter at U.S. News & World Report. "A lot of consumers do want those to be streamlined."
"Maybe millennials especially are used to the stay-at-home economy and having everything come to them. With the prospect of overnight delivery here, that's where the game-changing aspect of this is."
Amazon's ambitions in the healthcare space have been no secret. The company received wholesale pharmacy licenses in 12 states last year, and in January it announced a joint venture with JPMorgan and Berkshire Hathaway to provide health insurance and other services to employees. The threesome last week named well-known surgeon and writer Atul Gawande to lead that project as CEO.
"If there's one thing that [Amazon CEO] Jeff Bezos is known for, it's long-term execution," Devine said. "I don't think that other peers in this industry need to worry today, but I think that longer term, over the next three to five years, they need to watch out."
The PillPack acquisition was also a win for Amazon over rival Walmart. CNBC reported in April that the big box retailer had been looking to buy the company for about $1 billion. Amazon didn't officially disclose the terms of its deal.
But that wasn't the only news out of Amazon on Thursday -- the company also [announced a new plan to tackle issue of "last mile" delivery](https://cheddar.com/videos/amazon-launches-branded-delivery-service-aimed-at-small-businesses). That sent shares of FedEx and UPS plunging.
For full interview, [click here](https://cheddar.com/videos/amazon-s-healthcare-push).
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
Starbucks’ AI barista aims to speed service and improve experience. Nick Lichtenberg, Fortune Business Editor, explains its impact on workers and customers.
