Business, ethics and aesthetics: logistics and neighborhoods
An interesting piece of investigative journalism by Bloomberg called “Amazon doesn’t consider the race of its customers. Should it?” reveals that the online seller excludes poorer neighborhoods from its two-hour delivery service. After senior politicians highlighted the story, the company has now said it will offer the service in every neighborhood of the cities where the service is available.
Is this merely about aesthetics? The reality here is that the company didn’t intend to exclude specific neighborhoods from its same-day delivery, but simply made calculations based on the low-incomes in certain areas that would not make the service financially viable.
Companies such as Amazon tend not to make distinctions on the basis of race or class: instead, they develop services and assign resources on purely economic criteria. Amazon Prime, for example, is very popular in high-income homes, but much less so in less wealthy households. This makes sense: it costs $99 a year to sign up for the service, which also offers additional benefits such as streaming from the Amazon catalogue, photo storage on the cloud and free delivery in certain areas. Rolling out such a service requires planning and careful consideration when household incomes are below $40,000 (42 percent of those surveyed in such areas said they would use the service), compared to those with incomes of $112,000, where 70 percent of those asked said they would sign up.
Amazon Prime is one of the keys to the company’s recent growth: once a family decides to sign up, its spending on the platform almost doubles, driven either by a desire to make the most of that $99, or because delivery now feels “free”. This has allowed Amazon to develop its infrastructure even faster: Amazon Prime Now, which promises to get certain goods to Amazon Prime clients within a maximum of two hours is already available throughout Manhattan. It is being rolled out beyond the United States in cities such as London, where Amazon Fresh began by renting warehouses formerly used by the Tesco chain of supermarkets, then teamed up with Morrisons, and is now gearing up to offer one-hour delivery in the British capital.
Amazon Fresh seems unstoppable, giving people what they want immediately. But the question now is whether the company should be obliged to offer the service in every neighborhood, regardless of whether demand will be very low in poorer areas, or if it should be allowed to make its own decisions about delivery, based on income distribution. Is rapid delivery now becoming some kind of human right? Is it somehow reprehensible for a company only to offer certain services in areas where it believes there is sufficient demand to make it worthwhile?
In short, will cities be divided up into different zones based on the services that are available within them? Will some neighborhoods be considered more attractive, more gentrified or more expensive if they are included in the Amazon Prime Now delivery zone? And is this a question of ethics, or simply aesthetics?
(En español, aquí)
