We write to you as a coalition of New York City small businesses and economic stakeholders including Delivery Service Partner (DSP) companies, last-mile delivery operators, rental fleet providers, vehicle maintenance companies, and small business vendors who support the delivery ecosystem across New York City.
Collectively, our companies represent thousands of local jobs and millions of dollars in annual economic activity tied directly to last-mile logistics operations.
While we share the Council's goal of ensuring safe working conditions and fair labor practices, we are deeply concerned that Int 1396-2025 — specifically its direct employment mandate under §20-566.3 and its prohibition on third-party contracts — could unintentionally dismantle a thriving small-business ecosystem that has developed in New York City over nearly a decade.
What the Bill Would Do to Small Businesses
Section 20-566.3 of Int 1396 requires that all workers performing core delivery and warehouse services be directly employed by the facility operator. Section 20-566.3(c) explicitly prohibits contracting with any third parties — including staffing agencies or other subcontractors — for core services. While a 12-to-24-month grace period exists for existing contracts, the end result would be the elimination of the independent DSP business model in New York City.
Additionally, §20-566.4 imposes a $500,000 bond requirement per non-employee delivery worker and §20-566.11 establishes $1,000-per-day penalties for violations — provisions that would make it financially impossible for any facility operator to continue working with independent delivery companies even during the transition period.
The DSP Model Created a New Class of NYC Small Businesses
Since approximately 2018, Amazon's Delivery Service Partner program and similar last-mile contractor models have enabled hundreds of entrepreneurs to start logistics companies in New York City. These businesses include many veteran-owned, minority-owned, and women-owned businesses, first-time small business owners, and immigrant entrepreneurs.
For many of these owners, DSP programs represent one of the few scalable small-business opportunities requiring relatively modest startup capital compared to traditional industries. The bill's third-party contracting ban would eliminate these businesses entirely.
The Delivery Ecosystem Supports a Broader NYC Economic Network
Beyond DSP companies themselves, this sector supports a large network of NYC small businesses including vehicle rental companies, commercial fleet leasing providers, independent repair and maintenance shops, tire suppliers, fleet technology vendors, and compliance and safety vendors.
Each DSP typically operates dozens of vehicles and employs dozens of drivers, creating steady demand for these supporting businesses. The economic ripple effect extends far beyond delivery companies themselves.
Impact on Local Employment
Across New York City, DSP operators collectively employ thousands of drivers and support staff. These jobs provide entry-level employment opportunities, workforce development pathways, managerial experience, and opportunities for advancement into entrepreneurship. The DSP ecosystem has functioned as an economic ladder for many New Yorkers.
While §20-566.3(d) includes an employee retention provision requiring facility operators to offer rehire to terminated contract workers, there is no guarantee that all current positions will be preserved, nor any protection for DSP business owners and the broader network of supporting businesses that would be eliminated.
Risk of Unintended Economic Concentration
While the intention of the legislation is worker protection, mandating that all delivery workers be directly employed by facility operators would have the unintended consequence of eliminating hundreds of small delivery businesses, reducing competition in last-mile logistics, concentrating operations entirely under large corporations like Amazon rather than distributing them across independent local businesses, and removing proven pathways to entrepreneurship for veterans, minorities, immigrants, and first-time business owners.
The Rental Fleet Impact
Rental vehicle providers are also directly impacted. Many DSP operators rely on commercial rental vehicles to scale operations, particularly during peak periods. A disruption to DSP operations would directly reduce demand for these services and the jobs they support.
Impact on Local Service Providers
Independent automotive repair shops and maintenance providers across the city depend on DSP fleet work as a stable source of revenue. Many of these are small family-owned businesses that have invested in staffing and equipment to support this growing sector.
We Support Worker Protections — With Amendments
We support the bill's goals of improving safety, requiring training, and ensuring accountability. We welcome the licensing framework under §20-566.1, the safety training requirements under §20-566.7, and the anti-retaliation protections under §20-566.6. However, we believe these protections can be achieved without eliminating independent small businesses from the delivery ecosystem.
We respectfully request the opportunity to engage with your office to discuss possible amendments to §20-566.3 that would preserve the ability of licensed, compliant small businesses to continue operating within a regulated framework — achieving the bill's worker protection goals while maintaining small-business participation in last-mile delivery.
We believe strongly that worker protections and small-business growth can coexist.
Conclusion
New York City has long been a place where small businesses can grow and entrepreneurs can build opportunity. The DSP ecosystem represents exactly that type of opportunity. We respectfully urge the Council to consider the full economic ecosystem supported by these businesses before advancing legislation that could unintentionally dismantle it.
We welcome the opportunity to work collaboratively toward balanced solutions.
— NYC Last-Mile Delivery Business Coalition