TOKYO -- Amazon's "Prime Now" service in Japan, which promises to deliver packages as quickly as two hours after an order, will increasingly rely on an army of individual freelance drivers who are connected through an Uber-like network that mixes and matches availability.
Tokyo-based subsidiary Amazon Japan advertises that such drivers can earn $3,700 to $4,000 a month for 50 hours of work per week through its Amazon Flex program, which the company operates in the greater Tokyo area and parts of Aichi Prefecture, home of Toyota Motor.
The program will be crucial to sustain Amazon's operations in Japan, as the number of parcels for e-commerce grows rapidly while the shortage of drivers becomes acute as the country's population shrinks.
Amazon Flex also comes as more Japanese companies let their employees have side jobs, and it is regarded as a possible savior to the nation's distribution crisis.
Here is a look at how a man in his 40s works as an Amazon Flex driver. He is a freelance truck driver and has started to work for Amazon in his spare time.
At 7 a.m. on a day in early June, the man arrived in his light van at an Amazon Japan distribution center, receiving 45 packages for delivery to customers by 3 p.m. The Amazon Flex app guided him through the routes he should take to deliver the packages. Stickers on the boxes indicated the order in which the packages should be dropped off.
By a little past noon, the man had finished his deliveries for the day. The 10 boxes left in his van, due to the unavailability of the recipients, were handed over to another Amazon Flex driver working a later shift.
He earned 14,000 yen, or $130, for the day. The pay increases on weekends or rainy days. The driver can cancel his Amazon Flex shift if necessary by contacting Amazon Japan 45 minutes prior to starting his work.
Some of his colleagues earn $5,500 to $6,500 a month through Amazon Flex alone, he said.
To be eligible for Amazon Flex, a driver must be 20 or older and registered for small-size motor truck transportation.
Amazon made inroads into the Japanese market in 2000. The number of parcels handled by the Japanese home delivery industry has since continued to rise on the growth in online shopping, the aging of consumers and an increase in the number of two-income households. The industry figure exceeded 4.2 billion parcels for the year ended in March 2018. One private think tank estimates the number will climb by about 50% to 6 billion in the 2020s.
Industry leader Yamato Transport raised its base shipping fees in 2017, looking to curb its total parcel volume and thereby combat the company's deepening labor woes.
At the time, Yamato proposed a delivery rate hike of 30% to 40% to Amazon, then its biggest customer. The Yamato Holdings unit scaled back its contract with Amazon and withdrew from the e-commerce company's same-day delivery service.
Learning from that experience, Amazon moved to build its own distribution network, binding together second-tier as well as small and midsize transportation companies. Amazon currently has nine such transportation partners, including Maruwa Unyu Kikan and SBS Holdings.
But consumer demand for quick product delivery has grown further, and Amazon's parcel volume continues to rise. To offer a more sophisticated distribution service, Amazon apparently sees a need to forge a network incorporating individuals.
An executive at a major home delivery company predicts that Amazon will alter Japan's entire logistics landscape. "The era of the top three parcel delivery companies will end in the not-so-distant future," the executive said, pointing to the market now dominated by Yamato, Sagawa Express and Japan Post Service.
Beyond Amazon Flex, this delivery model also will benefit from Japanese companies increasingly allowing their employees to have side jobs, as well as from the proliferation of smartphones and a serious shortage of drivers delivering packages. The ratio of job offers to job seekers has topped 3 to 1 for such drivers.
CBcloud, a startup based in Tokyo's Chiyoda Ward, links more than 10,000 freelance drivers. The company receives job offers such as home delivery from corporate and other customers and introduces them to its registered drivers via a smartphone app.
CBcloud says it is adding 500 registered drivers monthly as more people want side jobs. The company also rents out mini-vehicles to those aiming to start a business.
"Compared with major companies, my company's free work style is being supported [by many drivers]," President Ryuichi Matsumoto said.
Many of the drivers registered with CBcloud also work for Amazon Flex and food delivery service Uber Eats, Matsumoto said.
Ecohai, a company based in Tokyo's Minato Ward under the umbrella of office supplies vendor Askul, offers a delivery service using bicycles. It launched "Ecohai Flex," which lets delivery staff choose their working times from three shifts.
Ecohai's delivery staffers apply for a shift by the morning of their workday. They need only smartphones for their work as they can deliver parcels in trolleys prepared by the company. They earn 150 yen for each parcel delivered.
Last One Mile Solution was founded in Tokyo's Chuo Ward by a former section chief at Sagawa, the parcel delivery company. It aims to establish a new home delivery network using 15,000 newspaper delivery outlets across the country. These individuals, already familiar with specific local areas, distribute packages commissioned by major home delivery companies in their spare time as side jobs.
Last One Mile Solution looks to offer the service through 1,800 newspaper delivery outlets in urban areas within five years and secure 10,000 delivery people.
"It will be humans for the time being who will be in charge of the 'last one mile' of delivering packages," President Masayuki Kondo said. "There are limits to the package volumes major [home delivery] companies can handle."