Amazon enters 'sharing economy' with Flex delivery

AMZN taps into the sharing economy
AMZN taps into the sharing economy

Amazon is tapping into the sharing economy.

The online retail giant has rolled out a service in its hometown Seattle to deliver packages ultrafast to its Prime consumers, using a crowdsourced network of drivers. The program's model is similar to those used by on-demand service providers like Uber and Lyft.

The new program, Amazon Flex, lets drivers sign up for shifts through an Android-based app that alerts them when there are delivery opportunities in their area. Amazon will pay the drives as much as $25 an hour.

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"You can choose any available two, four, and eight hour blocks of time to work the same day, or set availability for up to 12 hours per day for the future," Amazon said in an FAQ. "You can work as much or as little as you want." Amazon didn't immediately respond to CNBC's request for comment.

The company plans to expand the service to nine other major cities, including New York, Chicago, Baltimore, Atlanta and Miami. Drivers must be at least 21 years old and are required to pass a background check.

It's Amazon's latest attempt to speed up delivery service and reduce shipping costs as it as it aims to become a one-stop shop for consumers.

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Flex is a part of the company's Prime Now service, which promises to deliver certain packages in less than two hours. Prime Now is available only to members of the company's $99-a-year Prime club.

"Same-day and same-hour delivery have the potential to open an entirely new retail segment to Amazon, the instant gratification market," analyst firm Piper Jaffray said in a note last week, when it reiterated its "overweight" rating on the company's stock.

Brick-and-mortar retailers have traditionally enjoyed in-store pick up as a competitive advantage over Amazon. But "that advantage is slowly going away as Amazon ramps same hour and same day shipping," removing the hassle of shopping for minimal incremental cost, Piper Jaffray said.