CityLab Daily: Why Paris Wants to Tax Amazon Deliveries

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What We’re Following

Boxed in: It’s officially the holiday shopping season and that means more delivery trucks on city streets brought on by e-commerce. In the United States, millions of daily packages have not only brought about a delivery truck boom; they have inverted the dynamics for collecting the sales and property taxes that fund state and local governments. Globally, the convenience of the one-click e-commerce model has helped Amazon weave itself into the life of cities. And now, Paris wants to fight back.

Writing in an open letter in Le Monde, Paris mayor Anne Hidalgo called Amazon a “creator of precarity, congestion and pollution” and “an ecological disaster.” To rein in the negative effects of urban shipping, she proposed a plan that would charge a fee to e-commerce vendors, and limit delivery times and volumes in certain neighborhoods. While Paris’s share of the global Amazon market is limited, the proposal could become a model for other jurisdictions. The question is: Would city leaders be able to handle it if companies decided to pass such taxes on to their customers? CityLab’s Feargus O’Sullivan takes a look: Why Paris Wants to Tax Amazon Deliveries

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Why Paris Wants to Tax Amazon Deliveries

The French don’t celebrate American-style Thanksgiving. (Or the Canadian one, for that matter.) But that doesn’t mean they entirely miss out on the magic and hysteria of Black Friday sales: There is a huge spike in reduced-price deliveries at the end of the this month throughout France.

Which makes this a very good time for Paris Mayor Anne Hidalgo to open a new front in her ongoing campaign to mitigate the damaging effects of 21st century capitalism. In an open letter published in Le Monde, Hidalgo announcing proposals intended to make sure that e-commerce firms such as Amazon pay for the ills they are unleashing. Amazon, she wrote, was a “creator of precarity, congestion and pollution” and “an ecological disaster”; along with other services such as UberEats, the company should be charged a fee for its urban deliveries to offset the problems it causes.

Action was essential, the letter said, to avoid the kind of problems that New York City faces: Manhattan has “become a huge delivery area where anarchic shutdowns block all traffic,” and if nothing was done, then a situation like New York’s, where 1.5 million packages are delivered daily, would become “the nightmare that awaits us.”

The language used here is certainly strong, but Paris City Hall, which would likely re-propose the suggestions in more concrete form if Hidalgo and her administration are reinstated at March 2020’s municipal elections, is indeed picking up on a problem that’s rolling out globally. American cities are scrabbling to manage the sharp rise in retail freight that e-commerce has brought to its streets. In London, which since 2003 has employed a pioneering congestion pricing regime in the city center to control traffic, has seen its streets become even more congested than in the days before the charge, because private cars have been replaced by commercial vehicles, including delivery vans.

On average, Amazon now delivers around 250,000 packages a day in Paris, a number that rises tenfold in the days around Black Friday. Hidalgo’s proposal would limit deliveries to inner Paris neighborhoods to specific times, with a maximum number of deliveries capped for each area. Each of these deliveries would come with a surcharge payable by the company who sold the item delivered. If Amazon and other companies decide to pass this burden on to their customers—and it would be hard to prevent them from doing so—city leaders could be blamed for making shopping less affordable in what is already one of the worlds’ costliest cities.

The Paris City Hall proposals came out the day after the campaign group Attac, which lobbies for more stringent tax controls on multinational companies, released a report on the downsides of Amazon’s French operations. The report, supported by environmental campaigners Friends of the Earth and trade union Solidaire, details a litany of undesirable economic and environmental impacts associated with the company. The group claims, for example, that Amazon has made 57 percent of its French gross revenue untaxable, for example. Its overall global operations create more greenhouse gas emissions than the entire nation of Portugal, the report says, and the company’s ability to suppress competing businesses means that its American operations destroy two jobs for every one they create. The French report joins several new stories about Amazon’s labor practices and worker safety record in the U.S. that also focus on the price that we really pay for the convenience of online shopping.

Amazon has challenged the Attac report, saying that it is “contains many factual errors and [much] unfounded speculation.” Their own figures show that the company will have created 9,300 jobs in France by the end of 2019. While the company didn’t directly refute the report’s criticism of their emissions record, it nonetheless highlights its Climate Pledge, which aims for carbon neutral deliveries by 2030 and carbon neutral operations by 2040. Amazon also says that its current global order of 100,000 of electric delivery vehicles is the largest yet made by any company.

Such progress still lags behind that of some more-proactive companies currently working in France. The French postal service, for example, is already in the process of switching to electric and natural gas vehicles and bikes for the final mile of its deliveries, and by 2024, La Poste promises that its deliveries within Greater Paris will be entirely carbon neutral.

How important will political pressure from the city of Paris be when it comes to influencing the business practices of a retail goliath like Amazon? The company accounts for 17.3 percent of France’s e-commerce market and earned €6.6 billion ($7.3 billion) in revenue in the country in 2018. That falls short of the market dominance the company enjoys in the somewhat less populous U.K., when its income for the same year reached £10.9 billion, or in larger Germany, where it earned €16.9 billion. When compared to the enormity of of Amazon’s global operations, Paris’ proposed taxes would be like a gnat bothering an elephant, especially when you consider that Mayor Hidalgo’s policies only cover the 2.2-million-person historic nucleus of greater Paris.

What makes Hidalgo’s proposal of greater potential concern for online retailers is the possibility that it serves as a model for other jurisdictions. Based on media coverage so far, that could happen. One can easily imagine a similar call to tax e-commerce deliveries in the U.S. sparking a flurry of objections; in France, however, the Paris pushback was generally reported with subtle but implicit favorability. The right-leaning newspaper Le Figaro for example, had its own report this week on the higher prevalence of accidents in Amazon’s U.S. warehouses. If the company has influential cheerleaders in France, they’re currently keeping pretty quiet.

Given Amazon’s global market share, Paris’ plans hardly pose an existential threat. But in a climate where the environmental and economic effects of e-commerce are coming under increasing scrutiny from both legislators and the public, the city could be a trailblazer in the movement to rein it in.

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