UPS Asks Temp Workers to Use Their Own Cars for Holiday Deliveries

(Bloomberg) -- United Parcel Service Inc. is expanding its hires of drivers using their own vehicles to help with the avalanche of holiday deliveries spawned by online shopping, and that’s rattling veteran drivers of the iconic brown van from New York to Kentucky.

Unlike competitors FedEx Corp. and Amazon.com Inc., UPS has a unionized workforce, and local Teamsters leaders aren’t happy with a trend they see as reducing opportunities for their members and hurting the UPS brand.

“They’re lowering their own standards so much,” said Vincent Perrone, president of Local 804 in New York City and Long Island, where the personal-vehicle drivers will be used for the first time this year. The local has filed a labor grievance with UPS to challenge the jobs.

UPS’s expanding use of temporary employees who use their own cars to make deliveries is stoking tension between the courier and unionized workers after a contentious battle over a new labor contract last year. One sore point: Permanent drivers worry the expanded seasonal hires will mean they’ll earn less overtime during the busiest season of the year.

Perrone foresees all kinds of complications from the flood of new workers who aren’t prepared to cope with the everyday challenges of a UPS professional.

“Where is this guy going to fit a 50-inch flat screen in the back of a Nissan Sentra?” Perrone asked.

For UPS, hiring people who can use their own cars and trucks to deliver packages is a cheap and fast way to gear up for another record holiday season of deliveries amplified by the surge in e-commerce . The courier expects to handle an average 32 million packages a day from Nov. 29 through Dec. 30. That’s 5% more than last year, and 60% more than the rest of the year.

By hiring people who use their own vehicles, UPS avoids having to buy trucks it won’t need after the holiday rush ends, the company said.

“Buying more company-owned vehicles to manage seasonal spikes in volume would not be an efficient use of capital,” Glenn Zaccara, a UPS spokesman, wrote in an email.

Hello New York

While the company first began hiring drivers to use their own cars in 2016, it’s significantly broadening the practice this year, and extending its reach to new places including New York and Rhode Island. UPS says the 100,000 seasonal workers it will hire is about the same as last year. Drivers will make up a growing portion of those hires, however, as deliveries increase and automation reduces the need for workers inside the sorting and loading facilities.

There’s “a tremendous amount more” of the temporary drivers this year, said James DeWeese, a business agent for a Teamsters local in Louisville, Kentucky. “Our members are not happy about this at all, not a bit. It could have a drastic effect on overtime.”

Many UPS drivers count on the holiday surge to pad their income for the year at a time when their own spending rises.

The 500 union workers covered by the Rhode Island Teamsters union, which includes southeastern Massachusetts, will be seeing the personal-vehicle drivers for the first time this year, said Matt Maini, the local’s business manager. UPS has hired about 100 of the temporary workers for the area, he said, which could eat into the overtime the group usually earns.

“A lot of our guys normally would be working 60 hours, close to 70 hours a week right now,” Maini said. Because of the temporary hires, “they may be getting 50. So, they’re losing a lot of their overtime.”

Abundant Overtime

UPS challenged that idea. Its permanent staff of drivers always “work a significant amount of overtime during the peak holiday season, and this will occur again in 2019,” Zaccara said.

The company’s delivery drivers are the best paid in the parcel industry, with a starting wage of $21 an hour and full health and retirement benefits. The personal-vehicle drivers make the same wage plus a stipend for mileage. While FedEx and Amazon typically subcontract their seasonal drivers, UPS hires them directly full-time, and requires them to join the union.

UPS does background checks and inspects the cars before hiring people to deliver packages with their own vehicles. The new hires are given UPS brown uniforms and an identification badge.

The expansion in the seasonal hiring program is adding to tension between UPS and its union after a contentious battle over a new labor contract last year. The contract was rejected by the majority of voters, but ratified anyway because member turnout in the election didn’t meet the required threshold.

The delivery work should be offered first to UPS part-timers who work inside terminals to help sort packages and load trucks, said Matt Maini. “We feel like a lot of our part-timers would have taken that opportunity,” he said.

Balancing Act

Union officials complain that the temporary drivers will take away job opportunities from other union members who work inside the sorting hubs. Many of those hub workers are hired part-time to wait for a promotion to driver. Now, they may have to take a backseat to the seasonal hires, who can also compete for the permanent slots.

Finding the right balance of full-time, temporary and part-time jobs is an ongoing challenge to manage market fluctuations, UPS’s Zaccara said. To take fullest advantage of the growth in e-commerce, UPS must seek out “available and efficient means to absorb temporary spikes in demand,” he said, including tapping drivers who use their own cars.

“We cannot build a fleet designed for a seasonal peak and ignore the financial responsibility the company has to appropriately manage its annual business,” he said.

©2019 Bloomberg L.P.