After an analysis by Bloomberg News found racial disparities in Amazon’s Prime same-day delivery zones in several U.S. cities, Amazon said in a statement obtained by the Congressional Black Caucus that it will now serve all zip codes in the cities where the shipping program runs.
In reaction to complaints from advocacy groups and elected officials, Amazon said it would expand into zip codes like the Bronx in New York, Roxbury in Boston and Chicago’s South Side, and now has expanded its policy to ensure that all zip codes are covered in the cities where it offers same-day delivery. Amazon also said it will provide service in all zip codes whenever launching same-day delivery in additional markets moving forward.
On April 21, Bloomberg released a report stating that Amazon excluded some minority neighborhoods from its Prime same-day delivery maps in six major U.S. cities: New York, Boston, Atlanta, Chicago, Dallas and Washington, D.C. Amazon offers same-day delivery in 27 markets nationwide.
While it may be true that the algorithms driving Amazon’s ambitious same-day delivery expansion efforts were designed to identify the neighborhoods with the greatest concentration of Prime members and retail and delivery partners, the resulting Prime same-day delivery maps included pronounced racial disparities.
It’s not clear that Amazon ever realized the effect of its delivery map planning before the Bloomberg report led to outcry from local elected officials, including the Congressional Black Caucus, which represents black members of the U.S. Congress.
It’s also not like Amazon Prime is within reach to all Americans: Only those within a certain income level can afford to shell out $99 each year before even buying anything. But leaving out entire neighborhoods is still enormously problematic.
Considering that Amazon’s algorithms no doubt crunched the numbers, that could mean that the e-commerce giant’s same-day delivery plans just got more expensive. It’s not clear how profitable same-day delivery is in the first place, even for Amazon, so there may be more tweaks—in the form of fees or delivery minimums—to come.
Amazon's net sales increased 28% to $29.1 billion in the first quarter od 2016, compared to $22.7 billion a year ago. But its Q1 shipping costs nevertheless increased a hefty 42% to $3.28 billion.
Amazon continues to fuel speculation it’s planning to build its own full-scale delivery network, partnering with aircraft leasing companies Atlas Air and Air Transport Services Group. Beyond its air cargo moves, Amazon has in recent months purchased thousands of semi-trailers, invested in drones, and even registered as an ocean freight forwarder.