Rajpal Singh sweltered on his routes, delivering hundreds of packages every day for Amazon to homes on twisty dirt roads in the hills and valleys surrounding Lancaster and Palmdale, California. Temperatures in his van commonly climbed above 100 degrees.

The $19.75 hourly wage Singh said he was paid by Battle-Tested Strategies, a delivery company that counted Amazon as its only client, didn’t make up for the grind of the job.

“None of us felt we were being paid fairly,” Singh said of other drivers at the company. “That’s barely a living wage. Anyone who lives in L.A. County knows the truth, that most of us are going around figuring out which bills we are going to pay, how we are going to make sure there’s food on our table.”

Fed up, Singh and other drivers banded together. They demanded better working conditions and later took steps toward unionizing. Not long after Amazon officials got wind of the agitation, the retail giant canceled its contract with the company, forcing it to close and putting Singh and the others out of work.

Until getting laid off, Singh was part of an army of drivers who make up the backbone of Amazon, a juggernaut that totaled nearly $575 billion in revenue last year. A ubiquitous presence on city, suburban and country roads across the U.S., they race daily in a nonstop push to keep pace with the insatiable demand for doorstep delivery that Amazon itself helped create.

Long-running frustrations over pay and working conditions underscore tensions built into the delivery system Amazon has constructed, in which it contracts with a vast network of independent companies like Battle-Tested Strategies instead of hiring drivers directly.

The friction has escalated in recent months as drivers are increasingly following the lead of peers like Singh in pushing back against the arrangement, which they say has allowed Amazon to skirt responsibility for workplace issues.

A handful of unionization efforts have taken root around the country, with drivers emboldened by recent findings by the National Labor Relations Board that called into question whether Amazon can keep its drivers at arm’s length.

In one of those rulings, an NLRB regional director in Los Angeles determined last month that Amazon was a “joint employer” of the drivers who delivered packages for the now-defunct Battle-Tested Strategies. And last week, a regional director in Atlanta determined Amazon should be held liable for allegedly making threats and other unlawful statements to drivers seeking to unionize in the city.

Amid the growing unrest, last week the company announced a $660-million investment in its network of delivery companies, called the Delivery Service Partner program. With the infusion, which is intended to boost drivers’ pay, Amazon said it expects the national average pay for drivers to increase by $1.50, to nearly $22 per hour, a 7% increase over last year.

The pay hike, however, appears to have only strengthened the resolve of the International Brotherhood of Teamsters, the powerful union leading the push to organize Amazon’s drivers.

“The trillion-dollar company thinks small raises for drivers will distract them from fighting for fair pay and safe jobs in a Teamster contract,” said Randy Korgan, director of the Teamsters Amazon Division, in an emailed statement.

“If Amazon is serious, they need to put it in writing and respect what these workers are asking for, because every worker knows their word is no good,” he said.

Amazon spokesperson Maya Vautier said the investment in driver pay is not a response to the recent union pressures but part of normal adjustments the company makes to driver pay this time each year. Last year’s increase raised the average hourly pay for a driver by $1, to $20.50.

“We make these investments every year,” Vautier said.

Caught in the middle of the simmering labor fight are owners of the delivery companies.

One of them was Johnathon Ervin, who started Battle-Tested Strategies. The seasoned Air Force veteran and reserve officer was working as a contractor for weapons manufacturer Northrop Grumman when he came across an ad by Amazon in 2018 targeting veterans looking to start their own companies.

Amazon was pitching a new program that offered the chance to start a delivery company for as little as $10,000 in startup costs, Ervin recalled. Ervin traveled to Seattle on his own dime in 2019 for the training Amazon required of its delivery contractors and soon after launched his company. The arrangement required Ervin to hire his drivers and rent delivery vehicles and equipment from Amazon.

His business earned glowing performance reviews from Amazon. In a 2020 newsletter, Amazon championed Ervin as a face of its commitment to Black business owners.

Ervin said his relationship with Amazon soured in the summer of 2022, when one of Battle-Tested Strategies’ drivers had to be taken to the emergency room as a result of heat stress. Amazon’s reaction was to ask when the driver was expected to return to the station, Ervin said.

In 2022, after Amazon managers heard about the petition for better heat safety measures circulating among his drivers, Ervin said he was required by the company to have one of his supervisors complete an anti-union training with a legal firm Amazon retains for its delivery service partners. Amazon’s overall handling of drivers’ concerns was a red flag, he said.

“My main duty is the welfare, morale and training of troops. That’s extremely important. It’s in my DNA. And so anybody that works for me, whether it be in the military, or here at Amazon, I see them as my troops, and they need to be taken care of,” he said.

In early 2023, as the drivers were continuing to organize, Amazon began grounding his vehicles for what Ervin described as bogus reasons during daily safety checks that had never raised issues before, such as a scratch on a rear light and a slightly bent license plate. As a result, he was hit with several “breach of contract” notices by the company.

In April of that year, Amazon gave Ervin 60 days’ notice that it was terminating his contract. When his drivers pressed ahead with plans to unionize, which Ervin publicly supported, an Amazon spokesperson lashed out at them and Ervin. Battle-Tested Strategies, she said, “had a track record of failing to perform and had been notified of its termination for poor performance well before today’s announcement.”

Losing the company was a blow to Ervin, who estimates he had invested $35,000 of his own money to start it up, and saw his dreams for building a successful, profitable company crumble.

“I’ve lost everything,” Ervin said.

Although they arrived too late to help him, Ervin said the NLRB’s findings in the case brought by his former drivers was a “monumental victory” that resonates with “every Amazon subcontractor and employee who has felt the heavy hand of intimidation and bullying by Amazon.”

The board concluded that as a joint employer of its drivers, Amazon cannot use its network of delivery companies to shield itself from some responsibility for working conditions.

Amazon and the Teamsters are in negotiations as a result of the NLRB’s findings. The NLRB did not find merit to all of the Teamsters’ allegations regarding Battle-Tested Strategies. It dismissed, for example, the claim that Amazon’s decision to end its contract with Battle-Tested Strategies was retaliatory.

If the parties do not reach a settlement in the case, the labor agency would issue a formal complaint based on its findings. After that, the case would be heard by an administrative law judge, who could order the company to implement remedies. The judge’s decision could then be appealed to the labor board in Washington.

Other former owners and managers of delivery companies have raised similar concerns about the power Amazon wields over the companies in the Delivery Service Partner program and the implications for driver safety. Some have filed lawsuits alleging unfair treatment, false promises about profits, and unlawful termination of their delivery contracts.

In a proposed class-action suit filed in federal court in Seattle in 2022, Sacramento delivery company Fli-Lo Falcon alleged that Amazon “exercises near complete control” over subcontracted delivery companies, treating them as franchisees without any of the legal protections that designation would afford them.

Over the summer, drivers in Skokie, Illinois, went public with plans to join the Teamsters, demanding Amazon recognize their union. Instead, Amazon terminated its contract with the delivery company they worked for, Four Star Express Delivery.

And earlier this month, hundreds of drivers from several delivery companies in Queens, New York, staged a walkout to announce they were joining the Teamsters and to demand Amazon negotiate a contract with them.

Amazon, as it has in the past, disputes that subcontracted delivery drivers are employees of Amazon. The company disputes that it cut ties with Four Star Express Delivery, saying instead that Four Star voluntarily exited the program.

“These claims are false and based on either a misunderstanding or intentional misrepresentation of the facts. The truth is that there are multiple independent small businesses that deliver for us … and none of (the drivers) are Amazon employees,” Amazon spokesperson Mary Kate Paradis said in an emailed statement, referring to the Skokie activity.

The workers in Queens also are not Amazon employees, Paradis said, adding that “the Teamsters are well aware that the NLRB has not ruled that Amazon is a joint employer for these drivers, but they continue to lie because they want to deceive drivers.”

The recent NLRB findings probably helped to boost the burst of union campaigns, said Jake Rosenfeld, a sociologist who studies labor at Washington University in St. Louis.

“History has shown that Amazon is willing to simply sever the contracts of delivery companies whose workers do agree to unionize, so the Teamsters are figuring this is their best shot at making some cracks at Amazon,” Rosenfeld said.

2024 Los Angeles Times. Distributed by Tribune Content Agency, LLC.

Caroline Ellison, who testified against her former boyfriend and FTX founder Sam Bankman-Fried at his crypto fraud trial, was sentenced Tuesday to two years in prison for her role in the case, New York prosecutors told AFP.

Ellison, the former CEO of cryptocurrency firm Alameda Research, received a much lighter sentence than the maximum 110 years she faced after pleading guilty to seven charges, including fraud.

Her defense team had argued against prison time. Prosecutors with the Manhattan District Attorney’s Office said they had not requested Judge Lewis Kaplan issue a specific sentence, instead simply suggesting he take her earlier cooperation into account.

Ellison served as a key witness in the trial of cryptocurrency superstar Bankman-Fried—known by his initials “SBF”—who was sentenced to 25 years in March for one of the largest financial fraud cases in history.

He is serving his sentence in prison and has appealed his conviction.

During her court testimony, Ellison accused Bankman-Fried of dipping into customers’ funds to drive his more risky projects. He countered by attempting to pin the blame on Ellison, describing her as a bad manager.

A billionaire before he turned 30, Bankman-Fried had been a poster boy for the cryptocurrency boom.

Within the span of a few months, he had turned his small start-up FTX, first launched in 2019, into the world’s second largest cryptocurrency trading platform.

However, as exposed by the Bankman-Fried trial, the company had used the assets deposited into FTX to perform riskier transactions via sister company Alameda Research, as well as purchase real estate and make political donations.

FTX imploded in November 2022, reporting more than $8 billion in debt by the time the company filed for bankruptcy.

© 2024 AFP

The co-founder of one of the world’s most popular cryptocurrencies called for tighter regulation of the sector to guard against the fraud and wild swings that have dogged it, in an interview with AFP.

Jeremy Allaire of Circle recounted the US firm’s decision to offer a stabilized cryptocurrency—and insisted crypto operators owed it to society to submit to safeguards just as other emerging sectors such as AI must.

“We have social objectives that we have to match against the technology,” Allaire said during a visit this week to Circle’s European headquarters in Paris.

Circle offers a USDC “stablecoin”, pegged to the dollar, as well as a euro-pegged variant, EURC.

Currently, $35.5 billion worth of USDC are in circulation.

As with other cryptocurrencies, transactions are recorded on a decentralized ledger, the blockchain, and not by a bank as is the case with traditional currencies.

However, whereas the dollar value of cryptocurrencies such as bitcoin tends to fluctuate, often wildly, the creators of stablecoins actively target a stable value.

In a world propelled by technological development, Allaire said, safeguards are vital for such activities.

“If I’m writing software to control a ballistic missile system, that should be regulated activity,” said Allaire.

“If I’m writing a large language model and deploying that, and it has the potential to do very problematic things in society, there need to be rules that need to be assessed. Crypto is the same thing.”

Crypto fraud, ransomware

Cryptocurrencies have made headlines since their creation, from their extreme volatility to the collapse of several industry giants, foremost among them the FTX exchange platform.

The best-known cyptocurrency, bitcoin, remains the currency of choice for paying on the dark web without leaving any trace.

It is used for extorting funds via ransomware attacks, which block access to victims’ computer systems and demand a ransom payment.

According to a recent report by Chainanalysis, the first half of 2024 was marked by a decrease in illicit activities. However, over that period, $460 million was paid out for ransomware, a rise of two percent on a year earlier.

Crypto exhanges operate through open-source software, Allaire noted.

“That helps with transparency, visibility, security, other things.”

But some have been “using the technology to do things outside of any kind of supervision”, he conceded.

“You’ve seen fraud, abuse. You’ve seen people running off with money.”

When cryptocurrency emerged, “unregulated intermediaries” sprang up in the sector, he said.

“Of course, the risks they take… in many cases, have led to significant losses,” Allaire said.

“But that’s not an argument against the technology. That’s an argument against humans. And it’s an argument for better supervision.”

EU, US crypto regulations

Regulators across the globe have taken note.

Last year the European Parliament adopted an EU-wide framework for crypto asset markets, “MiCA”—Markets in Crypto-Assets—requiring mandatory approval for digital-asset service providers.

In July, Circle announced it was the first “stablecoin” issuer to comply with this new regulation.

Stablecoins are used to facilitate intra-crypto exchanges by investors without having to go through a bank.

But they also give users access to a product pegged to the dollar without having a bank account in the United States, and allow cross-border payments or money transfers.

In the United States too, greater regulation is on the agenda.

US presidential candidate Kamala Harris was quoted as telling Bloomberg last week: “We will encourage innovative technologies like AI and digital assets, while protecting our consumers and investors.”

In May the US House of Representatives passed a legal framework designed to regulate the crypto market—the Financial Innovation and Technology for the 21st Century Act.

Circle is meanwhile preparing to move its headquarters from Boston to New York City—”at the very top of the World Trade Center… the very heart of the dollar international system,” says Allaire.

“That’s in part symbolic. It’s also who we are, what we’re doing. We’re building, hopefully, the world’s leading digital dollar and upgrading to this new internet financial system.”

© 2024 AFP

Elon Musk’s X is in hot water with the EU for allegedly breaking new content rules—and the world’s richest man risks multibillion-dollar fines even he might find prohibitive.

The European Union could decide within months to take action against X, including possible fines, as part of a probe into whether the social platform is breaching a landmark content moderation law, the Digital Services Act (DSA).

Nothing has yet been decided, but if the EU’s executive does decide to strike then the amount Musk could be liable for might be considerably higher than expected.

That’s because the EU could calculate fines not just on the basis of X’s turnover—but on the revenues of Musk’s entire business empire, including Tesla and SpaceX.

Already embroiled in legal woes in Brazil, the social network formerly known as Twitter was accused by the European Commission in July of misleading users with its blue checkmarks for certified accounts, insufficient advertising transparency and failing to give researchers access to the platform’s data.

The allegations are part of a wider inquiry into X, opened in December, and regulators are still probing how it tackles the spread of illegal content and information manipulation.

Under EU legislation, for each of the offenses, Brussels could impose a fine of up to six percent of the annual worldwide turnover of the service “provider”.

“This applies irrespective of whether the entity exercising decisive influence over the platform or search engine is a natural or legal person,” European Commission spokesman Thomas Regnier told AFP.

In other words, the EU could hold Musk himself liable and the six percent could be levied against all the companies he controls—not just X.

That would potentially increase the penalty around thirty-fold, up from $200 million if only X’s revenues are targeted to over $6 billion for each of the separate charges.

AFP based the calculation on Tesla’s sales of $97 billion last year and estimates published in the media for X and SpaceX, neither of which release their figures publicly, totalling some $12 billion.

‘Very public battle’

Whether the EU will ever go that far is a major question.

Even if it does eventually decide to hit Musk with fines, experts say it is unlikely that Brussels would seek the maximum possible from the mega-rich magnate.

But just having the threat of such eye-watering penalties hanging over him could be enough to bring the “free speech absolutist” to heel—even if his net worth is currently estimated at $210 billion.

X can still avoid being told to cough up if it agrees to make changes in line with the EU’s demands.

The company now has access to the EU’s file and can defend itself including by replying to the commission’s findings.

In a move that might soften the tough stance from Brussels, the EU’s tech enforcer Thierry Breton quit suddenly this month after failing to get reappointed for a new term.

The combative Frenchman had taken a hard line against online giants and clashed with Musk in a series of high-profile spats.

For now, EU competition chief Margrethe Vestager is in charge, before Finland’s Henna Virkkunen is expected to take over as the bloc’s new tech chief.

But despite the change in personnel the EU insists its position remains firm.

The implementation of the regulations will now be “less political and flamboyant, but probably just as tough”, said Alexandre de Streel of the Centre on Regulation in Europe.

Romain Rard, from the law firm Gide in Brussels, said that extending the scope of the fine to cover Musk’s other companies would be a “conceivable” option for the commission to take, depending on how his empire is structured legally.

But, Rard cautioned, it would be a “much riskier” strategy for the EU.

Either way, any penalty that might be levied would almost inevitably end up being caught up in complex legal wranglings before the EU’s top court in Luxembourg—especially as Musk has already warned of a “very public battle”.

That could be a high-stakes first test case for the EU’s new content law, which has not yet been tested in court.

“It’s the courts that will end up deciding,” Rard said.

© 2024 AFP