Again Amazon is in a fix, this time for the lawsuit by the attorney general of Washington, D.C., Brian Schwalb. Breaking the law, as alleged by the retail giant, is when it denies two ZIP codes of the city—20019 and 20020—from some of its Prime program facilities concerning expedited delivery. These neighborhoods are mainly in Wards 7 and 8 and, historically, contribute most to as underserved because of the large population of Black residents present therein.
Since 2022, it’s said in Schwalb’s filing, the two ZIP codes have been secretly excluded from Prime’s alleged two-day delivery service while the residents go on paying the entire $139 for an annual subscription. Furthermore, the lawsuit filed accuses Amazon of committing violations of D.C.’s consumer protection laws by engaging in deceitful practices.
“The company is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide,” Schwalb stated. “While Amazon has every right to make operational changes, it cannot covertly decide that a dollar in one ZIP code is worth less than a dollar in another.”
Amazon referred to these charges made by Schwalb as baseless and refuted them by saying that there were security issues and that that was the main reason for changing the operations of deliveries in the areas. Kelly, a spokesperson for the company, said, “It is untrue that our practices are discriminatory or deceptive. We must be concerned about the safety of our delivery drivers because there have been targeted acts against them in these ZIP codes.” Kelly highlighted that Amazon is willing to work with authorities around safety improvements in the area.
Longer delivery times spark disparity concerns
The lawsuit claims that as of June 2022, Amazon has ceased using its intra-city delivery trucks in the two ZIP codes because of safety concerns for drivers. The company thus relied on partners like UPS and the United States Postal Service to service those areas. The operational shift brought about significant delivery interruptions for residents living in the locations.
Previously, more than 72 percent of Prime customers in the two ZIP codes received their packages within the two days stipulated. That figure dropped after the change to as low as 24 percent, with delivery speeds in other D.C. ZIP codes shooting up to 74 percent, as indicated in the complaint.
Amazon has found itself fighting similar accusations for equitable delivery in the past. Then, in 2016, a Bloomberg investigation found that in several top cities, Black residents had about 50% less chance of qualifying for same-day deliveries compared with their White counterparts. The company later expanded its delivery services in cities like Atlanta, Dallas, and Washington, D.C., to address the issue.
According to 2022 Census data, the ZIP codes mentioned in Schwalb’s complaint are predominantly Black. Critics argue that, given the reality that such residents are paid the same Prime membership fees as Prime members in wealthier, whiter neighborhoods, what Amazon has done recently only reenacts systemic inequities.
Compounding Amazon’s legal woes are separate complaints at the Federal Trade Commission (FTC), which, in June 2023, also filed a suit against Amazon. The FTC accused Amazon of concealing Prime registration and making it excessively difficult to cancel via design techniques called “dark patterns.” The case is to proceed to trial in June 2025.
Calls for transparency and accountability
It is also claimed by the lawsuit that Amazon never informed Prime members in those excluded ZIP codes about the delivery restrictions. Customers are complaining about slower delivery speed due to certain external causes as explained by Amazon, which is contrary to the policy decisions, according to the report.
Schwalb contends that he’d like to see damages, fines imposed, and a court order to stop Amazon’s alleged deception. This case further enlarges concerns about what customer rights can be imposed on corporate decision-making.
Although considerable expansion in logistics, including the use of branded delivery vehicles and increasingly employed gig-economy drivers, has been taken by Amazon, an area that it considers unsafe for its drivers remains excluded. The policy, which is part of the lawsuit, allows Amazon to shift deliveries in such areas to third-party carriers like UPS or USPS.
Put differently, the focus of the company on operational efficiency translated to record-breaking delivery times for these other regions, boasting even more than 5 billion items delivered within a day in the first half of 2024. Nevertheless, critics aver that achievements should never come at the sacrifice of fair treatment to all customers, notably from underserved communities.
Going forward with this lawsuit raises questions on corporate responsibility, equitably accessing services, and fascinating ethical questions surrounding operations decisions based on safety concerns. Amazon’s answer and the subsequent court rulings will thereby lay a precedent on what rights corporations have to maintain safety while equity in service delivery plays a fundamental role in operations.
