Dive Brief:
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Amazon said it will bring its Prime Now same-day delivery services to the Bronx after New York City elected officials criticized the e-commerce giant for excluding minority communities from the Prime Now footprint.
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The Bronx was the only one of the five boroughs that wasn’t part of Amazon’s New York City Prime Now services, also available in areas of Atlanta, Boston, Chicago, Dallas and Washington. Bloomberg Businessweek last week released an analysis showing racial disparities in Amazon’s delivery operations in areas of those cities as well.
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Amazon similarly moved to bring Prime Now delivery to Boston's Roxbury neighborhood after officials there also complained about the community's exclusion from the service.
Dive Insight:
Amazon is famously considered a tech company as much or even more than it's considered a retailer, and it relies on the cold calculations of algorithms to determine which zip codes will be privy to Prime Now delivery. But those calculations may be a bit too cold in human terms if they leave out whole neighborhoods, especially when those areas are primarily home to African-Americans or other minority groups.
Bronx Borough President Ruben Diaz Jr. and New York State Assemblyman Jeff Dinowitz, whose district includes the Bronx, had complained about the disparities, and Dinowitz has called for investigations of how Amazon identifies its delivery areas.
"The over 1.4 million residents of The Bronx deserve the same level of service and amenities as their neighbors," Diaz told Bloomberg. "I will continue to hold businesses and entities of all kinds accountable when they slight my constituents."
Of all the perks that Amazon members enjoy—like streaming television and musical entertainment, an e-book lending library and photo storage, among others—the real reason Prime members say they shell out their $99 yearly dues is the free, no-minimum, two-day shipping on many items, according to a study conducted late last year by RBC Capital Markets and reported by eMarketer.
In fact, the percentage of Amazon Prime members who say they prize free shipping over other benefits has crept up to 78% this year from 74% in 2013, far outpacing other perks. Meanwhile, Amazon’s shipping and fulfillment costs increased 37% year-over-year in Q4 to $1.8 billion and are growing faster than its revenue, which climbed 22% to $35.7 billion in the same period.