Amazon Doesn’t Consider the Race of Its Customers. Should It?
By David Ingold David Ingold and Spencer Soper Spencer Soper
April 21, 2016

Update 1 — Following the publication of this story, Boston Mayor Martin J. Walsh and Massachusetts Senator Ed Markey called upon Amazon to provide Prime Free Same-Day Delivery to Boston’s excluded Roxbury neighborhood. On April 26, Amazon agreed to expand the same-day delivery area to include all Boston neighborhoods. On May 4, all Boston ZIP codes were included. Read More

Update 2 — Following criticism from Bronx Borough President Ruben Diaz Jr. and New York State Assemblyman Jeff Dinowitz, Amazon announced on May 1 it will bring same-day delivery to every ZIP code in New York City in the coming weeks. Expanded coverage will include the Bronx, the only borough entirely excluded from the service. Read More

Update 3 — After demands from U.S. Rep. Bobby Rush, whose district covers excluded neighborhoods in Chicago's South Side, Amazon announced on May 2 it will extend the same-day service area to cover every ZIP code in Chicago in the coming weeks. Read More

For residents of minority urban neighborhoods, access to Amazon.com’s vast array of products—from Dawn dish soap and Huggies diapers to Samsung flatscreen TVs—can be a godsend. Unlike whiter ZIP codes, these parts of town often lack well-stocked stores and quality supermarkets. White areas get organic grocers and designer boutiques. Black ones get minimarts and dollar stores. People in neighborhoods that retailers avoid must travel farther and sometimes pay more to obtain household necessities. “I don’t have a car, so I love to have stuff delivered,” says Tamara Rasberry, a human resources professional in Washington, D.C., who spends about $2,000 a year on Amazon Prime, the online retailer’s premium service that guarantees two-day delivery of tens of millions of items (along with digital music, e-books, streaming movies, and TV shows) for a yearly $99 membership fee. Rasberry, whose neighborhood of Congress Heights is more than 90 percent black, says shopping on Amazon lets her bypass the poor selection and high prices of nearby shops.

As Amazon has expanded rapidly to become “the everything store,” it’s offered the promise of an egalitarian shopping experience. On Amazon and other online retailers, a black customer isn’t viewed with suspicion, much less followed around by store security. Most of Amazon’s services are available to almost every address in the U.S. “We don’t know what you look like when you come into our store, which is vastly different than physical retail,” says Craig Berman, Amazon’s vice president for global communications. “We are ridiculously prideful about that. We offer every customer the same price. It doesn’t matter where you live.”

Yet as Amazon rolls out its upgrade to the Prime service, Prime Free Same-Day Delivery, that promise is proving harder to deliver on. The ambitious goal of Prime Free Same-Day is to eliminate one of the last advantages local retailers have over the e-commerce giant: instant gratification. In cities where the service is available, Amazon offers Prime members same-day delivery of more than a million products for no extra fee on orders over $35. Eleven months after it started, the service includes 27 metropolitan areas. In most of them, it provides broad coverage within the city limits. Take Amazon’s home town of Seattle, where every ZIP code within the city limits is eligible for same-day delivery and coverage extends well into the surrounding suburbs.

In six major same-day delivery cities, however, the service area excludes predominantly black ZIP codes to varying degrees, according to a Bloomberg analysis that compared Amazon same-day delivery areas with U.S. Census Bureau data.

In Atlanta, Chicago, Dallas, and Washington, cities still struggling to overcome generations of racial segregation and economic inequality, black citizens are about half as likely to live in neighborhoods with access to Amazon same-day delivery as white residents.

The disparity in two other big cities is significant, too. In New York City, same-day delivery is available throughout Manhattan, Staten Island, and Brooklyn, but not in the Bronx and some majority-black neighborhoods in Queens. In some cities, Amazon same-day delivery extends many miles into the surrounding suburbs but isn’t available in some ZIP codes within the city limits.

The most striking gap in Amazon’s same-day service is in Boston, where three ZIP codes encompassing the primarily black neighborhood of Roxbury are excluded from same-day service, while the neighborhoods that surround it on all sides are eligible. “Being singled out like that and not getting those same services as they do in a 15-minute walk from here is very frustrating,” says Roxbury resident JD Nelson, who’s been an Amazon Prime member for three years. “It’s not a good thing, and it definitely doesn’t make me happy.” Rasberry was excited when Amazon announced Prime Free Same-Day was coming to Washington. But when she entered her ZIP code on the retailer’s website, she was disappointed to find her neighborhood was left out. “I still get two-day shipping, but none of the superfast, convenient delivery services come here,” she says. Rasberry pays the same $99 Prime membership fee as people who live in the city’s majority-white neighborhoods, but she doesn’t get the same benefits. “If you bring that service to the city,” she says, “you should offer it to the whole city.”

There’s no evidence that Amazon makes decisions on where to deliver based on race. Berman says the ethnic composition of neighborhoods isn’t part of the data Amazon examines when drawing up its maps. “When it comes to same-day delivery, our goal is to serve as many people as we can, which we’ve proven in places like Los Angeles, Seattle, San Francisco, and Philadelphia.” Amazon, he says, has a “radical sensitivity” to any suggestion that neighborhoods are being singled out by race. “Demographics play no role in it. Zero.”

Amazon says its plan is to focus its same-day service on ZIP codes where there’s a high concentration of Prime members, and then expand the offering to fill in the gaps over time. “If you ever look at a map of service for Amazon, it will start out small and end up getting big,” he says.

This is a logical approach from a cost and efficiency perspective: Give areas with the most existing paying members priority access to a new product. Yet in cities where most of those paying members are concentrated in predominantly white parts of town, a solely data-driven calculation that looks at numbers instead of people can reinforce long-entrenched inequality in access to retail services. For people who live in black neighborhoods not served by Amazon, the fact that it’s not deliberate doesn’t make much practical difference. “They are offering different services to other people who don’t look like you but live in the same city,” says Rasberry.

Amazon cites several reasons a ZIP code within a city may be excluded: too few Prime members to justify the expense of sending out trucks and drivers, or the area is too far from the closest Amazon warehouse. “Distance matters,” Berman says. “At some point, with the math involved, we can’t make it work—in time, or in cost for the carrier. There is a diminishing return on orders.” In some cases, Amazon says, it’s difficult to find delivery partners willing to serve the area. “We deliver same day up till 9 p.m.” says Amazon spokesman Scott Stanzel. “There are a lot of carrier partners. A lot of variables.”

Amazon won’t reveal specifics about how it decides its same-day delivery areas—the competition would kill for that info, says Berman. Broadly speaking, it comes down to cost. Same-day delivery is expensive to provide, in part because Amazon can’t rely on the built-in infrastructure and low negotiated rates of United Parcel Service and the U.S. Postal Service, which shoulder the retailer’s standard and two-day Prime deliveries. To get packages out within hours, Amazon uses a mix of its own drivers, local couriers, and independent contractors making deliveries in their own vehicles through an Uberlike service called Amazon Flex.

Cities where Amazon offers broad one-day coverage appear to have something in common: close proximity to product warehouses, making it less expensive to reach all areas. “It’s not the only variable. It’s certainly one of them,” says Berman. “It definitely has an impact if we have a fulfillment center that’s outside a city, or we have a fulfillment center that happens to be on one side of it.” Amazon declined to reveal the locations of its same-day hubs, so it’s difficult to tell how that works. In same-day cities Amazon hasn’t yet surrounded with warehouses, the company must decide which neighborhoods are worth the cost of service and which aren’t. That’s where things get complicated.

Atlanta

Amazon’s Prime Free Same-Day Delivery closely mirrors the city’s historical racial divide. The largely white northern half is covered, while the largely black southern half isn’t. The company extends the service 35 miles north of downtown but excludes Norcross, a less distant eastern suburb where blacks and Hispanics outnumber whites, and Redan, with a black population of 94 percent.

Explore the coverage areas | One dot equals 100 people
Boston

Although Amazon’s same-day service is available to most addresses in Boston and reaches almost to New Hampshire, the centrally located neighborhood of Roxbury, with a population that’s about 59 percent black and 15 percent white, is excluded. The residents of the ZIP codes that border Roxbury on all sides are eligible for the service. Amazon’s Berman calls Roxbury “an anomaly.”

Update — On May 4, coverage expanded to include all of Boston.

Explore the coverage areas | One dot equals 100 people
Chicago

Amazon’s same-day service area includes about 2.2 million people in the city but excludes about 472,000 people in Chicago’s predominantly black South Side. Berman says the South Side ZIP codes are beyond the reach of the company’s distribution center in Kenosha, Wisconsin, about two hours north of the city. Yet same-day service is available to Prime members in Oak Lawn, which is eight miles farther south than the excluded portions of Chicago and has a white population of about 85 percent. The company does offer the service in largely black neighborhoods in the city’s center, including Austin.

Explore the coverage areas | One dot equals 100 people
Dallas

Amazon’s same-day service area includes suburbs between Dallas and Fort Worth, but about 590,000 residents of eastern and southern Dallas, where a majority are black or Hispanic—such as Oak Cliff—are just outside the delivery area. Amazon cited distance from the company’s warehouses and a low concentration of Prime members as reasons those areas were left out.

Explore the coverage areas | One dot equals 100 people
New York City

Amazon’s same-day coverage area extends, unbroken, from New York City all the way south to Philadelphia, with one notable exception: The largely black and Hispanic borough of the Bronx, which is excluded from the service. The Bronx has the lowest percentage of white residents of the five boroughs at about 33 percent. Berman says the Bronx is difficult to reach because the warehouses that serve the area are in New Jersey.

Explore the coverage areas | One dot equals 100 people
Washington, D.C.

One of Amazon’s largest same-day service coverage areas extends from Washington, D.C., north to Baltimore and encompasses much of the Maryland and Virginia suburbs. Yet all neighborhoods in the capital’s predominantly black southeast quadrant are excluded, along with several largely black Maryland suburbs to the southeast—notably Suitland and Silver Hill, which have average income levels comparable to those in some ZIP codes between Washington and Baltimore that do have same-day coverage.

Explore the coverage areas | One dot equals 100 people

Some excluded ZIP codes correspond with higher crime rates. Amazon won’t say whether concerns about stolen packages or the safety of drivers figure into its decisions about where to deliver, saying only “the safety of our employees is a top priority.”

Income inequality may also play a part. Many excluded areas have average household incomes below the national average. And households with Prime memberships skew wealthier—not surprising given the $99 membership fee. An April study of families with teenagers by investment bank Piper Jaffray estimates 70 percent of such U.S. households with incomes of $112,000 per year or more now have a Prime membership, compared with 43 percent for households with incomes of $21,000 to $41,000. Income differences alone don’t explain the gaps in service, however. In Chicago, New York, Boston, Atlanta, and other cities, some areas that are excluded have household incomes as high or higher than ZIP codes Amazon does cover.

Berman points to cities where some black ZIP codes get same-day service and some white ones don’t. In Los Angeles, black and Hispanic communities south of downtown have same-day service, but mostly white Malibu, on the far side of the traffic-clogged Route 27 and Pacific Coast Highway, doesn’t. In several cities where the same-day service area encompasses the vast majority of all residents, including Los Angeles, San Jose, and Tampa, a higher percentage of blacks live in ZIP codes eligible for same-day delivery than whites. Overall, though, in cities where same-day service doesn’t extend to most residents, those left out are disproportionately black. (In the six cities with disparities, Asians, on average, are as likely as whites to live in an area with coverage; Hispanics are less likely than whites to live in same-day ZIP codes, but more likely than blacks.)

Percentage of Residents Eligible for Same-Day Delivery

“As soon as you try to represent something as complex as a neighborhood with a spreadsheet based on a few variables, you’ve made some generalizations and assumptions that may not be true, and they may not affect all people equally,” says Sorelle Friedler, a computer science professor at Haverford College who studies data bias. “There is so much systemic bias with respect to race. If you aren’t purposefully trying to identify it and correct it, this bias is likely to creep into your outcomes.”

Amazon says it’s misleading to scrutinize its current delivery areas so closely, because the service is new and evolving. Eventually, coverage will extend to every ZIP code in same-day cities, says Berman. The service is indeed expanding. Since Bloomberg first contacted Amazon for this article in February, the company announced 12 new same-day cities. As it adds locations, however, Amazon has yet to extend coverage to excluded majority-black ZIP codes in the existing cities with gaps in service. How long will those customers have to wait to get the full benefits of their Prime membership? Berman says there’s no set timetable: “We’ll get there.”

Juan Gilbert, chair of the University of Florida’s department of computer and information science & engineering, says Amazon has an opportunity to use its data resources to correct its oversight and avert falling into the retail patterns of the past. “I think it was a mistake, and it never crossed their mind,” he says. “This is a perfect example of how Amazon had a blind spot.”

Update, April 21: Corrects the number of New York City residents who live in ZIP codes eligible for Amazon same-day delivery; updates the article and final chart to indicate cities where black residents are more likely than whites to live in zip codes eligible for same day service.
 
Methodology

Amazon’s website allows users to type in ZIP codes to see where Prime Free Same-Day Delivery is available. Bloomberg entered every U.S. ZIP code into the tool, and mapped the results on top of a complete U.S. ZIP code shape file, provided by ESRI, to produce a coverage map of Amazon’s Prime same-day delivery areas. Coverage maps show Amazon data as of April 8, 2016.

Population data were compiled using block group figures from the 2014 American Community Survey 5-Year estimates tables. Table B03002—Hispanic or Latino Origin by Race—provides population figures by racial category, including the following subsets: white alone, black or African-American alone, Hispanic or Latino, Asian alone, and other races. The data were released on Dec. 3, 2015 and are the most recent local population data available from the ACS. All ACS figures are estimates with a 90% confidence interval and are subject to a margin of error. City-level figures presented in the graphics and charts are compilations of individual block group estimates, and share the same 90% confidence level.

Each population dot represent 100 residents, and are evenly distributed across each block group. They do not represent exact addresses, and populations below a 100-person threshold within an individual block group are not shown.

In some cases, individual block groups straddle multiple ZIP codes or intersect a city boundary. Often these block groups feature clear divisions between residential areas, and nonresidential areas made up of parks, lakes, or empty land. In these cases, a block group was included in the ZIP code that included the residential area. When a block group was not clearly separated in this manner, the population was proportionally distributed based on the area of overlap.