Amazon has agreed to pay more than $3.7 million to settle claims with the City of Seattle’s Office of Labor Standards (OLS) over allegations that it violated ordinances protecting gig and app-based workers during the pandemic.

OLS said in a news release Wednesday that Amazon only provided premium pay and paid sick and safe time (PSST) to workers when they performed deliveries for Amazon Flex’s food or grocery business lines — but not to workers who performed package deliveries from Amazon’s warehouses.

Amazon Flex uses independent contractors that drive their own vehicles to deliver items for Amazon business lines.

Amazon denied the allegations, but will pay $3,777,924.10, consisting of settlement payments and credits to 10,968 affected workers and $20,000 in fines to the City of Seattle.

The alleged violations cover three city ordinances: Gig Worker Premium Pay, Gig Worker Paid Sick and Safe Time, and App-Based Worker Paid Sick and Safe Time.

OLS alleged that in violation of the Gig Worker Premium Pay ordinance, between Aug. 27, 2021, and Oct. 31, 2022, Amazon failed to provide premium pay to Amazon Flex gig workers for deliveries with a pick-up and/or drop-off in Seattle that were not for its food/grocery business lines.

OLS further alleged violations of the Gig Worker Paid Sick and Safe Time and the App-Based Worker Paid Sick and Safe Time ordinances between Jan. 31, 2021, and Jan. 12, 2024. The agency said Amazon Flex failed to establish an accessible system for gig workers to request and use PSST for workers that were not delivering for its food/grocery business lines, and it failed to provide correct monthly PSST notification to workers that were not delivering food/grocery.

“Gig workers served on the frontlines throughout the pandemic, providing critical services like grocery and food delivery to our vulnerable neighbors and elders,” Mayor Bruce Harrell said in a statement. “These workers remain a valued part of our workforce today and deserve fair pay and protections.”

The Gig Worker Premium Pay and Gig Worker PSST ordinances were temporary ordinances enacted during the pandemic to allow gig workers access to extra pay and sick leave benefits. With the lifting of the mayor’s emergency order on Oct. 31, 2022, the two ordinances are no longer in effect.

The settlement with Amazon Flex is the second largest in OLS history, according to OLS Director Steven Marchese.

In August, Uber Eats agreed to pay $15 million to more than 16,000 delivery workers in Seattle over allegations that the tech giant violated laws regulating how workers are paid. A majority of that settlement was related to the city’s Independent Contractor Protections (ICP) Ordinance, which passed in 2021 and aims to ensure pay transparency. 

Affected Amazon Flex workers can expect settlement payments starting around Jan. 1, according to OLS.

Update: Amazon provided the following statement to GeekWire on Wednesday:

“The Puget Sound region is our home, and we’re proud to serve customers here while supporting the community through good job opportunities, support for local small businesses and organizations, and hundreds of millions in local investments. We’ve always complied with Seattle laws relating to providing paid sick and safe time to delivery partners — including when the City Council enacted emergency measures during the pandemic for food delivery app-based workers, and following the 2024 expansion of the rule to include all app-based workers. While we strongly disagree with OLS on the facts of this matter, we’re pleased to put it behind us and remain focused on continuing to improve the experience for our customers and the drivers who deliver to them.”

Amazon will try a new twist on local deliveries at a shuttered site in Seattle’s Ballard neighborhood: a retail-style delivery hub for rapid dispatch of Amazon Flex drivers.

Permit filings describe it as a store in which no customers will ever set foot. Instead, Amazon employees will fulfill online orders — picking and bagging items in a back-of-house stockroom, placing the completed orders on shelves at the front of the space, and handing them off to Amazon Flex drivers for rapid delivery in the surrounding neighborhood.

The documents outline a continuous flow in which drivers arrive, scan in, retrieve a packaged customer order, confirm it with an associate, and depart within roughly two minutes. The operation is expected to run 24 hours a day, seven days a week.

It will operate “much like a convenience store,” Amazon says in one filing.

The plans for the former Amazon Fresh Pickup site, at 5100 15th Ave. NW, haven’t been previously reported. The project uses the code “ZST4,” with the “Z” designation representing a new category of Amazon site that aligns with the recently introduced “Amazon Now” delivery type — short, sub-one-hour delivery blocks from dedicated pickup locations.

Recent screenshots shared by Amazon Flex drivers on Facebook show Amazon Now at similarly named sites, such as ZST3 in Seattle’s University District and ZPL3 in Philadelphia, suggesting the Ballard project is part of a broader rollout of small, hyperlocal delivery operations.

It’s part of Amazon’s larger push into “sub-same-day” delivery — in which smaller, urban fulfillment centers carry a limited set of high-demand items for faster turnaround. The company has been trying different approaches in this realm for several years, looking for the right combination of logistics and economics.

Amazon is far from alone in exploring new models for ultrafast delivery. GoPuff, DoorDash, Uber Eats, Glovo, FreshDirect and others all operate variations of quick-commerce or micro-fulfillment networks, often using partnerships or “dark stores” — retail-style storefronts that are closed to the public and used solely to fulfill online orders at high speed.

Amazon’s Flex program launched 10 years ago. Flex drivers are independent contractors who deliver packages using their own vehicles, signing up for delivery blocks through the Amazon Flex app. The program has often been described as Uber for package delivery. 

What’s different about the new Seattle site, and the Amazon Now initiative, is the speed and simplicity of the operation. As described in the filings. it emphasizes rapid handoffs, with drivers cycling through in minutes rather than loading up for longer delivery routes.

The permit filings emphasize that some delivery drivers will use personal e-bikes and scooters to make deliveries, reflecting the smaller size of the orders and the short distances involved.

Testing the economics

Supply-chain analyst Marc Wulfraat of MWPVL International, who tracks Amazon’s logistics network, said the approach is similar to its legacy Prime Now and Amazon Fresh local delivery sites, with the twist of operating more like a store than a warehouse, based on Amazon’s description.

He said that could mean Amazon will stock perishable items in cooler displays in addition to shelf-stable goods. (That could align with Amazon’s recent effort to integrate fresh groceries directly into Amazon.com orders, letting customers add produce and other chilled items to standard same-day deliveries.)

The filing doesn’t detail the types of products to be available from the site, except that they will be “essential items and local products that are in-demand and hyper-focused on the needs of local customers within the community.”

“I tend to view these as lab experiments to test if the concept is profitable,” Wulfraat said. 

The challenge with these small-format sites, he explained, is that each order tends to be low-value, which means the combined cost of fulfilling and delivering it can take up a large share of the revenue — raising questions about whether the model can be profitable.

Amazon has experimented with similar ideas before.

In late 2024, the company shut down “Amazon Today,” a same-day delivery program that used Flex drivers to pick up small orders from mall and brick-and-mortar retailers. CNBC reported at the time that the service struggled because drivers often left the stores with only one or two items, making the cost per delivery far higher than traditional warehouse-based routes. 

That pullback illustrated the economic challenges of ultrafast delivery and smaller orders. But by operating the new Seattle “store” itself, the company should be able to control more of the variables, including inventory flow, pickup efficiency, and the labor required in the process.

Under the plan, the new Ballard hub will be staffed by four shifts of six to eight Amazon employees each — which translates into 24 to 32 employees per day. The site is expected to dispatch about 240 vehicles over a 24-hour period, with peak volumes of 15 to 20 trips per hour.

It will be the second time for this building to host an Amazon retail experiment. The site previously operated as one of only two standalone Amazon Fresh Pickup locations in the U.S., offering drive-up grocery retrieval and package returns for Prime members beginning in 2017. 

Amazon closed the Ballard pickup site in early 2023 amid a broader pullback from several brick-and-mortar initiatives, shifting focus to other Amazon Fresh stores, Whole Foods, and online grocery delivery. The building has been closed since then.

Fitting into the zoning

The emphasis on the retail-style nature of the new Seattle delivery hub could also serve another purpose: helping ensure the facility fits within its retail-focused zoning designation.

The site is zoned for auto-oriented retail and service businesses, and permitted as a retail store for general sales and services, a classification Amazon secured in 2016 when converting the building from a restaurant. (It was previously the longtime location of Louie’s Cuisine of China.)

If the city agrees the new use qualifies as retail, Amazon may avoid a formal change-of-use review — a process that can trigger additional scrutiny, including updated traffic assessments, environmental checks, and requirements to bring older buildings up to current codes.

Amazon’s permit filing repeatedly uses retail terminology and describes Flex drivers as proxies for customers: “Our store will have a small front-of-house area where customer selected products are available for customer representatives (Amazon Flex Drivers) to come in to pick up the purchased products,” reads a narrative included in the filings, dated Oct. 31. 

The approach could also double as a template for areas of the country where officials are cracking down on “dark stores” in retail corridors. Cities including New York, Amsterdam, and Paris have moved to regulate or ban micro-fulfillment centers from storefronts, arguing that they make urban cores less lively and violate zoning codes.

There’s no word yet on Amazon’s timeline for opening the new facility. We’ve contacted the company for comment on the project and we’ll update this post with any additional details.

[Thanks to the anonymous tipster who let us know to look for the filing. If you have newsworthy information to share on any topic we cover, email tips@geekwire.com or use our online form.]

The City of Seattle is interviewing candidates for a City AI Officer position to lead how artificial intelligence is utilized across departments and offices.

The new job is in line with the city’s recent release of a “responsible AI plan,” which provides guidelines for Seattle’s use of artificial intelligence and its support of the AI tech sector as an economic driver.

The CAIO will report to Rob Lloyd, the city’s chief technology officer, who said the job posting attracted 3,000 visits in the first week it was live. From roughly 40 highly qualified applicants, nine are being invited to interview, with backgrounds ranging from the private sector, federal government and academia.

Lloyd, who started as CTO last year, said the “very competitive” applicant pool also includes a few ex-Microsoft employees. A hire should be made by next week.

“We created the city AI plan [because] there’s lots of things that happen with AI for an organization to be effective at it,” Lloyd told GeekWire. “We defined a couple domains of activity that we have to be successful at.”

The CAIO will manage those domains, including:

• Technical excellence and orchestration: The city’s AI plan ensures that infrastructure, programming, data, and process engineering are aligned under a coordinated strategy. Lloyd said success depends on an “elite-level AI expert” to oversee frameworks, technology, and training.
• Learning, skilling, and responsible adoption: With 39 departments, the city must build a shared understanding of AI use. The focus is on preventing “AI product sprawl” and aligning solutions with city priorities — such as budget directives and executive orders—while improving AI literacy, consistent terminology, and awareness of AI’s impact on workflows and people.
• Partnerships and community activation: The plan connects internal AI efforts with academia, startups, and local organizations to strengthen Seattle’s AI ecosystem. By fostering collaboration and shared understanding around AI safety and innovation, the city enhances both its capabilities and its role as a responsible community partner, Lloyd said.

The use of AI has the ability to reshape how numerous city departments do their work and serve residents. Lloyd pointed to adoption already under way in the Seattle Department of Transportation, where AI and game theory are being used to analyze areas with higher accident rates and find patterns and anomalies in reports and help accelerate design options so safe intersections can be engineered.

Public utilities, public safety and permitting are also ripe for AI disruption, Lloyd said, but the approach is to augment human workers, not automate and displace them.

“There is plenty of space we can look at where staff are overwhelmed,” he said. “We’re not getting to the response level that we aspire to, and there’s areas where we want to make decisions even smarter, even faster. We can take AI and focus on those things, not to displace jobs, but to get to the service levels and decision making that we want to create.”

Seattle has been a leader in creating guidance for AI use, and claims to be the first in the nation to issue a generative AI policy in the fall of 2023. The city has policies requiring “human-in-the-loop” oversight, where employees must review generative AI outputs before official use and attribute any AI-assisted work to the specific technology.

When it comes to the new AI officer and the AI plan, Lloyd stressed the importance of “making sure that we focus on our values and how we apply AI in the organization and the community.”

The annual salary for the CAIO role is between $125,000 and $188,000, according to the job posting.

Whoever comes away with the job will join a city government that is willing and able to work with a number of local “assets,” as Lloyd called them, including the University of Washington, AI House, Ai2, Plug & Play, and more.

“We are the second biggest epicenter of AI talent,” he said. “It would be a really sad thing if we did not take advantage of that opportunity and play to that strength.”

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