Amazon’s Delivery Battle in NYC Intensifies 🚚

Frank Sinatra famously called New York the “city that never sleeps” in his iconic 1980 recording of New York, New York — the song that now plays after every Yankees home win.

But if Sinatra were singing about New York today, there is another line he might choose.

A city that always shops.

That is because approximately 2.5 million packages are delivered across New York City each day, a number roughly equivalent to the population of Houston. At almost any hour, somewhere in the five boroughs, a purchase is being made, a package is being sorted, a van is pulling up to a curb, or a delivery worker is carrying a parcel to a front door.

But this very journey could soon change. A proposed bill, the Delivery Protection Act, could change how packages make their final journey to customers and potentially reshape how major e-commerce and delivery companies operate across New York City. According to experts, Amazon, with the vast last-mile network it has built across the city, could be particularly exposed to the changes.

Before getting into the bill and what it could mean for Amazon and other delivery companies, we need to first understand the most important part of the order fulfillment journey: the last mile, and why getting those final few miles right is so difficult in New York.

Every e-commerce order makes a long journey before it reaches the customer. A typical process involves the package moving from a fulfillment center to a regional distribution hub, then to a local delivery facility and finally to the customer’s doorstep. That final leg is what the logistics industry calls the last mile.

The earlier stages of the journey are built around moving large volumes between a relatively small number of locations. The last mile is different. A truck or van that arrives at a local facility with hundreds of packages may have to make dozens of separate stops across a city to deliver them, often one package at a time. And this is where the economics of delivery become particularly expensive. 

According to a McKinsey study, B2C delivery carriers lose 3% to 5% of their revenue to detention and dwell time—the time drivers and vehicles spend waiting or stopped rather than making deliveries—with roughly 160 million hours lost this way every year in the U.S. When those lost hours are multiplied across millions of deliveries, the cost of the last mile quickly becomes significant.

A Capgemini Research Institute study states that last-mile delivery costs account for 41% of total logistics supply chain costs.

But the importance of last-mile delivery goes beyond cost. The delivery is often the final interaction a customer has with a brand; the last mile can directly shape the customer experience, satisfaction, and loyalty. It is where the supply chain meets the customer. 

According to Veho's 2026 State of Delivery Report, which surveyed nearly 2,000 U.S. online shoppers, 75% said a positive delivery experience makes them more likely to purchase from a retailer again. But the consequences can work in the opposite direction too: 40% said they had stopped buying from a retailer after a package never arrived, while 33% had done so after a late delivery.

That is why retailers and e-commerce companies have spent years trying to solve the last-mile problem, making it faster, cheaper, and, above all, more predictable. 

And no other company has found greater success in that endeavor than Amazon.

Over the years, the company has assembled one of the most extensive delivery networks in e-commerce, integrating its own infrastructure and technology. At the center of that network is a program Amazon launched in 2018 called the Delivery Service Partner, or DSP program.

In 2018, the American shopping economy was already beginning to look very different from the one Amazon had entered two decades earlier. According to the U.S. Census Bureau, U.S. e-commerce sales reached $519.6 billion, up 13.2% from the year before. Online sales accounted for 9.9% of total U.S. retail sales. But the more important number was Amazon's. The e-commerce giant was already capturing nearly 40% of American online spending.

That kind of scale created a problem of its own. Amazon was no longer simply selling more products online. It had to move an ever-growing number of those purchases through the physical world and onto customers' doorsteps. And while Amazon had spent years building fulfillment centers, warehouses, and the technology connecting them, much of the final journey still depended on someone else's delivery network.

The company had a simple problem: the faster it promised the package would arrive, the more important the final mile became.

So Amazon began looking for a way to build a robust delivery capacity while gaining greater control over what happened after a package left its fulfillment network. The answer came in 2018 with the Delivery Service Partner program.

It was a clever division of labor. Amazon could expand its delivery network without having to own every van, employ every drive,r or build every local operation itself. The company supplied the volume and the system. The partners supplied the people and the local management.

And the model scaled.

Nearly a decade after its inception, the DSP program has become a vital cog in Amazon's delivery machine. According to Amazon, its DSP network now includes 4,400 entrepreneurs who have created 390,000 driving jobs and generated $58 billion in revenue for their businesses. Together, these companies deliver more than 20 million Amazon packages every day across 19 countries.

And yet, there is something unusual about the way this network operates.

The vans carry Amazon branding. The drivers often wear Amazon-branded clothing. Their routes are determined through Amazon's delivery technology. Amazon controls much of the infrastructure surrounding the work. But the drivers do not legally work for Amazon. Instead, they work for the DSPs.

And this separation is what New York is now trying to change.

The e-commerce boom in New York City has been building for years. Just like the rest of the country, more and more New Yorkers have moved their shopping online, swelling the number of orders flowing through the city every day. And the scale of that shift is striking. 

According to the New York City Comptroller’s Office, the city was receiving roughly 1.1 million packages a day in 2017. By 2019, that figure had climbed above 1.8 million. The pandemic pushed the trend into overdrive, with daily deliveries reaching 2.3 million by 2021. By 2024, New York was handling 2.5 million packages every day — a 127% increase in just seven years.

As more and more shoppers moved their purchases online, the logistics of delivering millions of packages through one of the country’s densest urban environments became increasingly complex. To accommodate the e-commerce boom, New York City had to build an entirely new layer of logistics infrastructure. 

Over the past decade, that has driven a wave of new “last-mile” facilities — warehouses where packages are sorted and dispatched for the final leg of their journey to customers—across the five boroughs.

According to the New York City Comptroller’s Office’s 2025 report, Fast Shipping. Slow Justice: Traffic, Worker, and Climate Hazards in Last Mile Delivery, 18 large last-mile facilities have opened across New York City since 2017, with 11 opening since 2020. 

The broader warehouse market tells the same story. According to testimony from the New York City Department of Environmental Protection in February 2025, 35 warehouses and distribution centers larger than 75,000 square feet were either newly constructed or completely renovated across New York City over the previous decade. Of those, 20 were at least 250,000 square feet, more than doubling the number of buildings that size operating across the five boroughs. 

But moving these facilities closer to customers came with a trade-off. According to the New York Comptroller's analysis report, 14 of the 18 new last-mile facilities saw an increase in injury-causing crashes after opening, with injuries within a half-mile of the facilities rising by an average of 16%. Truck crashes increased by an average of 146% across the 18 sites. 

The report does not attribute individual crashes directly to delivery vehicles operating from these facilities. But the findings show that the expansion of last-mile infrastructure coincided with a significant increase in truck traffic and crashes in the surrounding areas. 

The impact does not stop at the curb. It extends to the thousands of workers who sort, load, and deliver those packages every day.

According to the Comptroller’s 2025 report, 38 of the 50 last-mile facilities it identified reported workplace injuries to OSHA between 2022 and 2024, with more than 2,000 injuries recorded over the three years. The injury rate at these facilities was 8.3 injuries per 100 workers, more than three times the national average for private-sector employers of 2.4. 

When looked at specifically in terms of Amazon’s Delivery Service Partners, the numbers tell a more striking story. DSPs in New York City reported 625 workplace injuries in 2023 and 2024, and 89% of those injuries were serious enough to require workers to take time off, work with restrictions, or be reassigned. Their injury rate was 9.2 injuries per 100 workers, higher than the 8.3 recorded across last-mile facilities overall. 

Since Amazon does not directly employ these drivers, the employment relationship and the associated responsibilities do not formally rest with Amazon. Instead, those obligations fall on the independent Delivery Service Partners that employ the drivers.

That is where the Delivery Protection Act enters the story.

The bill was first introduced in September 2025 by Council Member Tiffany Cabán, but for months it remained largely a City Council issue. That changed on August 10, 2026, when Mayor Zohran Mamdani publicly threw his support behind the legislation, giving the bill a much bigger spotlight.

He argued that companies such as Amazon had built billion-dollar businesses through a subcontracting system that allows them to avoid responsibility for working conditions and safety.

At its core, the legislation tries to change two things.

First, it would put the last-mile industry under a new city licensing system. Certain last-mile warehouses and distribution facilities would need a license from the Department of Consumer and Worker Protection and would have to meet minimum standards for worker safety, training, and working conditions. The bill would also require safety training, injury recordkeeping, and other worker protections, including 30 days' notice and a stated reason for termination.

The second — and far more consequential — change is who employs the workers. The bill would require companies operating covered facilities to directly employ workers performing core services, including transporting and delivering packages to New York City residents, rather than relying on subcontractors for that work. 

For Amazon, that strikes directly at the DSP model that has allowed it to build a huge delivery workforce without directly employing the drivers carrying its packages.

In other words, the legislation is not simply asking Amazon to give drivers more safety training. It is challenging the structure that sits underneath the entire delivery operation.

So, how has Amazon reacted to this new proposed legislation? 

It’s worth noting that Amazon is not the only company that could be affected by the passage of this legislation. FedEx, DoorDash, and alternative carriers such as OnTrac also rely on independent contractors to support parts of their delivery operations.

And ultimately, the impact may come down to a much simpler question: what does all of this mean for the customer?

The biggest advantage of New York’s last-mile network has always been its ability to get packages to customers quickly and at relatively low cost. But what happens to those benefits if that network is forced to change?

According to a June 2026 impact assessment by AKRF, the answer could be higher costs and slower service. 

About 36% of New York City’s current daily parcel volume is tied to contractor-based operations that could be affected by the legislation, according to AKRF. Under its most disruptive scenario, in which affected operators relocate facilities outside New York City, average delivery costs across the city could rise by 95.5%, while costs for packages handled by relocated operations could increase by 267.5%. 

Even under more moderate scenarios, AKRF projects citywide delivery costs could rise by roughly 58% to 61%.

There will also be an impact on speed. AKRF estimates that service levels could decline by 10% under a full-relocation scenario, and by as much as 21% if out-of-city facilities face capacity constraints. This translates to longer delivery windows and less availability of same-day and next-day delivery. 

However, the disruption would not affect every carrier equally. 

UPS and the U.S. Postal Service could stand to benefit from the shift, because they already directly employ their delivery workers and would not have to dismantle a contractor-based model to comply with the law. As companies such as Amazon and FedEx potentially reduce or restructure their contractor-based operations, some of that package volume could shift to UPS and USPS, giving both carriers an uptick in order volumes in New York City.

For now, nothing has been decided.

New York City's Delivery Protection Act is currently laid over in the Committee on Consumer and Worker Protection, after the committee held a hearing on April 9, 2026. If the bill is to become law, it still has to clear the Council's legislative process and ultimately be enacted.

Even if it passes, companies would not have to change their delivery operations overnight. The legislation gives operators a transition period – in this case two years – for the direct-employment requirement. But perhaps the more interesting question is what happens beyond New York.

The fight over Amazon's DSP model is already spreading. Chicago has introduced its own Delivery Protection Act, targeting subcontracting in last-mile delivery and imposing licensing requirements on delivery facilities.

If the Delivery Protection Act is passed in New York, it could set a precedent for how last-mile networks operate across the United States — and force logistics companies of all sizes to rethink how they structure, staff and manage their delivery operations.

This newsletter was written by Shyam Gowtham