Platforms are fighting for creators with cash. But it's brands that are funding the content. - Protocol

Creators say money they make from creator-specific funds is “a little bonus, like lunch money.”
Social media platforms are trying to attract creators with a slew of new monetization tools.
Jeff Jenkins left his teaching job four years ago with one goal in mind: to create content that could help plus-size people travel the world.
Jenkins created profiles on Facebook, Instagram, Pinterest and YouTube to promote his business, Chubby Diaries. He initially took out a small-business loan and worked for a couple years as an Uber and DoorDash driver while building up his social media presence, all in the hopes that eventually, he would be able to make a living off social media platforms.
But he said it wasn’t the money from YouTube ads, Instagram tips or other monetizing features on the platforms that helped him make a steady income. In fact, it barely had anything to do with the sites at all. Jenkins’ accounts took off at the height of the Black Lives Matter movement in 2020, when more brands began reaching out to Black creators. “That actually helped propel me to where I’m at today,” Jenkins said.

Social media platforms are trying to attract creators with a slew of new money-making tools, including dedicated funds and subscriptions. Meta recently released Reels, its short-form video platform, globally, and with it, more ways for users to make money, like overlay ads. Mark Zuckerberg said he wants Reels to be a place where creators can build a following and “make a living.”
But creators who make a living from social media told Protocol that unless their videos are consistently going viral, they can’t rely on these funds alone to sustain themselves. Instead, their money comes from external sources such as brand deals or merchandise sales.
“It took almost two and a half years before I really started making some kind of money,” Jenkins said. “And that involved me getting more consulting and speaking gigs at the beginning. It’s continued to evolve … Now I have brands that reached out to me.”
Jeffery Jenkins

Jeff Jenkins’ accounts took off at the height of the Black Lives Matter movement in 2020, when more brands began reaching out to Black creators. Photo: Jeff Jenkins
Instagram, YouTube and TikTok have all made dedicated funds for creators.
YouTube set aside $100 million for its YouTube Shorts Fund, which rewards creators anywhere from $100 to $10,000 each month based on viewership and engagement. In addition to the Shorts fund, the platform offers nine other ways for creators to monetize through a mix of ad revenue and tipping features for followers. Most recently, the platform began encouraging podcasters to make video versions of their podcast episodes with grants of up to $300,000, sources told Bloomberg.
“Over the past few years, we’ve been working to build a multifaceted business that helps YouTube creators grow and diversify their revenue,” a YouTube spokesperson told Protocol.
Pinterest and Snap incentivize users with cash, too. Pinterest launched a Creator Rewards program that pays eligible users based on engagement, and Snap pays creators through a mix of gifting and rewards for top-performing short-form videos.
Meta dedicated $1 billion to creators in the form of bonuses, which will pay eligible creators on Instagram and Facebook for hitting certain milestones. Part of that investment includes a Reels bonus program, where creators can make up to $35,000 a month based on views.

More broadly, Instagram and Facebook creators can also make money through paid online events and other tools that incentivize followers to chip in. “There isn’t a one-size-fits-all approach to monetization, so across Meta we’re focused on building a suite of monetization products that can support the different business needs of creators in the long term,” a Meta spokesperson said.
TikTok, on the other hand, introduced a $200 million creator fund in July 2020, which gives money to creators who reach at least 100,000 authentic views within a 30-day span. TikTok plans to grow that fund to $1 billion by 2023.
Instagram, TikTok and YouTube did not share how many eligible creators are taking advantage of these funds. But at least on TikTok, the fund is attracting more and more people: Hank Green, who has over 6 million followers on the platform, said at one point he made 5 cents per 1,000 views. Now, he makes around 2.5 cents per 1,000 views after the number of creators eligible for the fund increased.
Kira West said making money off platforms alone is like working in a restaurant: You might make a lot of money one night and very little the next. And “unless you’re getting a million views on Reels, you’re not really making enough to pay rent and other expenses,” West said.
Alex Hall saw this issue on TikTok. They’ve amassed 100,000 followers on the platform, which qualifies them to make money from the platform’s tipping feature, where users can tip at most $100 per transaction and $500 per day. Hall is also part of the TikTok Creator Fund.
But Hall said they don’t make much money from the TikTok Creator Fund. They have posted about 60 videos and racked up over 700,000 likes since launching the account last summer, but they’ve only pocketed about $140 from the fund. And while they bring in some cash from followers through TikTok’s tipping feature, it’s not a reliable source of income.

Instead, Hall said they work with two full-time clients on branded content and take on paid sponsorships on a case-by-case basis, which helps bring in a steady, reliable income. “Branded content is still king,” Hall said. “Doing partnerships with companies that really want you to stay authentic to yourself while promoting their own things is still paying off more than any other [tools] at the moment.”
Kira West, Alex Hall, Vivian Tu Kira West, Alex Hall and Vivian Tu say that money they make through platform funds are a “bonus.”Photos: Kira West, Alex Hall, Vivian Tu
Creator Ashleigh Reddy has had a similar experience on Instagram, where she’s been making money through paid sponsorships since 2016.
When Instagram introduced a bonus program for Reels, Reddy was offered a maximum of $500 to $800 per month if she got enough views over a 30-day period, but she doesn’t depend on those funds as a source of livable income. “You would have to post every day or maybe multiple times a day, then hope that at least a few go viral,” Reddy said.
“It’s a little bonus, like lunch money,” Reddy said.
Brand partnerships are where the money’s at. But those depend as much on the creators as they do the brands: People often don’t know how much to charge for their work. And while Instagram, TikTok and YouTube all introduced features to help match people with brands, those resources only make the connection. They don’t help set rates.
Chayse Byrd, who has amassed almost 1 million followers on TikTok, didn’t know she was undercharging for posts until she connected with other creators. She was first charging brands $200 per post — the amount someone with a following of 5,000 should charge. Now, her rate sits around $6,000. “I wasn’t charging that rate because I lacked knowledge in that area,” Byrd said.
“Once I realized I was selling myself short, I experienced a wave of initial frustration and anger, but at the end of the day, I’m glad I found out this way,” she added. “Yes, I was being underpaid for a while, but each time I posted, I was happy with the product I created, and I was just as happy to be a part of something that I knew would benefit others.”

Zoe Peterson runs an outdoor travel account called The Adventure Addicts on Instagram alongside her partner. She said they’ll work with brands here and there in exchange for a product. They’ve started taking those deals less often, though, because it wasn’t worth the amount of time it took to create content.
Peterson’s account has over 20,000 followers, but she said she’s unsure how big her platform needs to be to be able to ask for money instead of products. “Some companies are so excited about working with us and want to pay us, and some companies are like, ‘Oh, no, we only do gifted things,’” she said. “Honestly, I have no idea [how big we need to be]. We pitch to brands and try to get paid deals. And sometimes it works out, and sometimes it doesn’t.”
All agreed that platforms should play a bigger role in helping creators make money, regardless of where the money’s coming from. Vivian Tu, who has more than 1 million followers on TikTok and over 250,000 on Instagram, said she hopes platforms eventually put more focus on helping creators make income through external sources rather than trying to bring them onto their platforms with their own in-house features.
“As TikTok gets more developed, I think there will be more solidified pricing of what brands should be paying, because I do think a lot of creators are undercharging,” she said.
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Sarah Roach is a news writer at Protocol (@sarahroach_) and contributes to Source Code. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school’s independent newspaper, The GW Hatchet.
There are steps Facebook and YouTube could have taken to limit RT and Sputnik’s reach years ago. They didn’t.
Social media giants could have taken any number of soft actions over the years that would have deprived Russian propaganda of oxygen.
Issie Lapowsky ( @issielapowsky) is Protocol’s chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol’s fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing.
Jack Dorsey’s beard was not yet Rasputin-esque when he sat down for his first Senate hearing in September 2018. Seated to his right was Sheryl Sandberg, and over his left shoulder, a few rows back, lurked Alex Jones, the conspiracy theorist whom Twitter would ban from the platform the next day.
It had been a year since the world found out about Russian efforts to turn Americans against each other during the 2016 U.S. election, and Dorsey and Sandberg were on the Hill to explain what their companies had done since to ensure it never happened again.
One big change Dorsey shared: Twitter blocked Russia Today and Sputnik from advertising on the platform shortly after the Russian interference plot became public. Not only that, Dorsey said, but the company had also donated the $1.9 million it made from those outlets to charity. That seemed to satisfy Twitter’s inquisitors in the Senate.

For the next four years, though, not a single other major U.S. tech platform followed suit — that is, until now. Over the course of the past week, Meta and Google have blocked RT and Sputnik throughout the EU, Russia and Ukraine. They’ve barred them from advertising or making money from ads, and Meta and Twitter have moved to limit their visibility in users’ feeds worldwide.
Shocking no one, on Thursday RT America laid off its staff with euphemistic flourish, citing “unforeseen business interruption events.” Russia, meanwhile, has retaliated against Silicon Valley’s actions by banning Facebook entirely.
Silicon Valley’s response to the war has been both forceful and speedy. But it doesn’t change the fact that these very companies also enabled Russian state propaganda for years before the fighting broke out. That’s even despite Russia’s actions in 2016 and the director of National Intelligence report on Russian interference in 2017 and the Mueller report in 2019 and the ongoing global information war the Kremlin has been openly waging on U.S. tech platforms ever since.
It didn’t have to be this way. Social media giants could have taken any number of soft actions along the way that would have deprived Russian propaganda of oxygen without requiring Facebook or YouTube to block them entirely. For one thing, prioritizing trustworthy information over engagement across their platforms would have helped.
“A lot of the things that get rid of spammers and bad actors in general would also hurt RT and Sputnik,” said Jeff Allen, a former member of Facebook’s integrity team and co-founder of the Integrity Institute think tank. “RT bats above its weight on social media, relative to Google search. There are systems that could have been adopted much earlier that would have made it more difficult for RT to get attention.”
But of course, that’s not the world that Facebook and YouTube have created. And so, RT now has millions of subscribers and followers on both platforms. When Meta decided last week to demote RT and other Russian state media, it was because the company had “no choice,” Samidh Chakrabarti, Facebook’s former head of Civic Integrity, tweeted. Facebook “needed to at least partially undo the damage that years of recommending these entities have done (and the scores of permanent Page followers they created),” Chakrabarti wrote.

Facebook and YouTube also missed an obvious chance to ride Twitter’s coattails and cut off Russian state media from ads in 2017. At Facebook, at least, that’s not because it didn’t consider it, but because it worried about how it would have to apply such a policy globally to other state media outlets like the BBC, said Katie Harbath, Facebook’s former public policy director. “How do you start drawing the line around what state media is OK and what’s not?” she said, recalling those conversations. Instead, Facebook announced in 2019 that it would begin labeling state-media outlets, a step toward transparency that didn’t require limiting anyone’s reach.
It’s worth wondering what impact tech platforms can even have in weakening an outlet like RT, at least inside Russia. After all, an organization funded by the Russian government hardly relies on YouTube ads to survive. “It’s important to distinguish between steps that are symbolically useful versus steps that have a real effect on the information environment,” said Emerson Brooking, a resident senior fellow at the Atlantic Council’s DFRLab.
Still, even symbolic steps have consequences. Now, tech giants have found themselves in, arguably, a worst case scenario: Having allowed Putin’s propaganda machine to grow online for years, they had no choice but to take a blunt instrument to it when a war broke out. Now, Russia has cut off access to a critical communication tool for millions of people. Which is, of course, what these companies wanted to avoid all along.
Issie Lapowsky ( @issielapowsky) is Protocol’s chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol’s fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing.
Today’s job landscape is challenging for organizations looking to recruit and retain top tech talent. Recent labor trends, many of which are fueling The Great Resignation, have shown leaders across industries that their employees are searching for more. In addition to conversations around compensation and work conditions, they want opportunities to grow professionally and to level up their careers.
The tech industry continues to face a persistent talent shortage, and exacerbating this challenge is the increasing difficulty for organizations to retain their current workforce. A recent survey reported that 72% of respondents working in IT were planning to quit their jobs in the next 12 months. Additionally, another survey of technology executives shows that tech executives believe finding qualified talent is their biggest current challenge.
How can organizations keep their technology talent happy and engaged? How can they not only attract, but also retain top-level technology talent so their companies can continue innovating and delivering value to customers? Technology organizations need to look internally to find the talent they seek by upskilling and reskilling their existing tech workforce. For this vision to become a reality, organizations must focus on being creators, rather than consumers, of talent.

I’d like to share three examples of why companies must shift from simply consuming talent to creating a talent base that will carry them into the future.
Building winning teams may be the most difficult task for any business leader. This is especially true for building technology teams, where the competition for talent has never been more fierce.
1-800-Contacts is an excellent example of a company that recognized the challenge of finding qualified tech talent to fill its open tech roles and created an innovative solution to combat the problem. As the competition to hire tech talent increased, the company decided to implement a program that focused on upskilling from within the organization. To accomplish this, they created their CTAC University training program, and partnered with Pluralsight to create programs with which they could upskill, reskill and onboard technology workers with speed.
As part of the program, 1-800-Contacts created a formalized pathway for employees from across the business to join the company’s technology organization. As a result, the company has been able to create new career pathways for top performers, retain institutional knowledge and create a new pool of candidates to address tech worker shortages. The company is taking call-center employees that are brought into the company culture and turning them into software engineers and IT experts.
One of the most common themes we see when working with companies looking to develop their workforce is that technology innovation is changing so rapidly that it’s difficult for tech teams to keep pace. The most successful companies counter this by developing a culture focused on skill development that maps to their organizational goals.
Accenture recognized the pace of tech innovation and the need to build technology acumen across its organization. Accenture partnered with Pluralsight to develop its “Technology Quotient,” or TQ program, to address skills and knowledge gaps and ensure its teams had the tools to get the most out of technology. TQ helps build tech fluency across the organization and keeps all team members (tech and non-tech) engaged and up to speed on the rapidly changing tech landscape.

Since its launch less than two years ago, Accenture has used TQ to upskill more than 100,000 people. And it’s accomplished this incredible feat in a remote work environment. The program’s customized learning paths allow for collaboration between team members at different levels, helping to grow tech skills at scale within the organization.
One of the biggest lessons that we’re learning as companies vie for top tech talent is that technologists want to feel engaged and have the tools and programs at their disposal to grow. Tech workers feel more engaged when they’re given opportunities to learn and develop. Pluralsight’s recent State of Upskilling report indicated that more than half of the technologists surveyed value opportunities to grow professionally more than they value competitive compensation.
When workers aren’t engaged, companies can suffer the consequences. Workers with greater institutional knowledge are harder to replace and losing them can derail project timelines and product launches. Losing a technical or senior employee can cost up to 150% of that employee’s salary, according to Built In.
Manulife is a shining example of an organization that embraced a culture of upskilling to keep its technology teams happy and engaged while driving innovation. Manulife is working to break down the “myth” that top talent comes only in the form of the “7-year veteran engineer.” Instead, it wants to be an example: that you can hire junior talent, grow that talent within your organization and create a talent pipeline that serves the business for years to come. The company created several programs to assist its 10,000 engineers as they develop the technology acumen and skills they need to accomplish the company’s most important technology initiatives. These programs include a comprehensive upskilling program as well as an onboarding process that they call “Manulife University,” which helps get their new tech talent up to speed quickly.

During the onboarding process, Manulife measured the time it took for its engineers to get up to 100 lines of code. It saw that engineers who were able to get up to speed more quickly reported higher job satisfaction and generated more referrals for new talent.
These companies exemplify how to address one of the biggest problems in our industry. As organizations grapple with finding tech talent in a market that has too few qualified candidates to fill roles, resourceful organizations understand that if you can’t find it, you must build it. It’s these organizations that will win as we push into an increasingly digital world.
A proposed federally funded cloud for AI research was expected by some to be a resource for academics. Now, in addition to likely involvement by the top commercial cloud providers, The National AI Research Resource might be available to private-sector startups too.
Just who will get to use the NAIRR remains in question.
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of “Campaign ’08: A Turning Point for Digital Media,” a book about how the 2008 presidential campaigns used digital media and data.
Rima Seiilova-Olson wasn’t sure why she was the only startup founder on a panel full of academics.
“I feel a little puzzled,” said Seiilova-Olson, co-founder and chief machine-learning scientist at a mental health AI startup Kintsugi, talking to Protocol about her participation in a Feb. 16 federal task force meeting about how she might use a federally funded AI research cloud.
The National AI Research Resource, or NAIRR, would be a repository of data and tools for AI research combined with access to the computing power necessary to develop machine learning and other AI systems. The proposed project is currently being evaluated by a task force overseen by the White House Office of Science and Technology Policy and the National Science Foundation.
Just who will get to use it remains in question. The National Artificial Intelligence Initiative, established by Congress in 2020, envisions the NAIRR as a research hub “for AI researchers and students across scientific fields and disciplines” including from “communities, institutions, and regions that have been traditionally underserved.”

That legislation, which established the task force planning the NAIRR, does not exclude private-sector researchers, but some believe they should not belong in that community. Researchers from the Stanford Institute for Human-Centered Artificial Intelligence, an influential proponent of the project, have indicated that the government-funded research hub should focus on the needs of academic and nonprofit researchers.
“Public investment in AI research for noncommercial purposes may help to address some of the issues of social harm we see presently in commercial contexts, as well as contribute to shifting the broader focus of the field toward technology developed in the public interest by the public sector and civil society, including academia,” wrote the institute in an October 2021 white paper.
Amid representatives from five colleges and universities, Seiilova-Olson was the lone speaker representing the private sector at the virtual panel discussion addressing the needs of various potential users of the NAIRR.
She discussed her goals as a startup founder trying to compete with Big Tech. Kintsugi is developing machine-learning models to help detect clinical depression and anxiety based on voice data, and she said that means the company needs access to costly computing power to process large-scale, unstructured data.

But in addition to the nuts and bolts of building AI, Seiilova-Olson said the NAIRR also should provide training or community resources for people without access to traditional computer-science education.
“An open resource that is freely available for people, I think it’s extremely important. It played a huge role in my journey from being a regular software engineer to being a machine-learning scientist,” she said during the panel discussion, explaining her background using online training to advance her AI skills.
Rima Seiilova-Olson Rima Seiilova-Olson.Courtesy: Rima Seiilova-Olson
“There’s a big need for small players like myself to benefit from these resources, and I’m not talking about compute power and data,” she told Protocol last week, adding that she hopes NAIRR can provide access for STEM-related educational resources for underrepresented people.
After Seiilova-Olson spoke at the NAIRR meeting, Lynne Parker, task force co-chair and the founding director of the National AI Initiative Office at the OSTP, told her she made “a really strong case for how the availability of resources can really make a huge impact, including in particular for startups.”

Jen King, privacy and data policy fellow at the Stanford Institute, said use by private-sector researchers would pose legal and logistical issues, as well as distract from the core mission of the research cloud. “Overloading this resource out of the gate to address very different sets of users — small business and academic researchers — may jeopardize its development and ultimately its effectiveness,” she told Protocol.
Seiilova-Olson said she was personally invited by Parker to join the panel discussion, but she wasn’t sure why. Her company has ties to the National Science Foundation. She said it has awarded Kintsugi with around $1 million in NSF grant funding, some of which the company has yet to receive.
“In NAIRR task force discussions to date, a number of task force members have suggested that small business and startups, specifically those funded by federal [small business innovation] grants, have important perspectives that could help inform the task force’s work,” said Andres Anzola, press secretary at the OSTP. He said the task force co-chairs worked with federal subject matter experts to identify a grant recipient to participate in the panel discussion.
Seiilova-Olson, who co-founded her company after a personal experience with postpartum depression in the hopes of helping other parents, said startups are important contributors to AI research in part because they develop AI that is intended to be commercialized, and therefore possibly meet people’s needs.
However, noting her respect for academic research, she also said, “academic researchers have their own ideas that may be a bit detached from the needs of regular citizens.”
King said NAIRR may not be the appropriate home for startup AI research. “Small business AI may be expressing legitimate needs and constraints with competing against big AI, but the NAIRR may not be the right solution for addressing them,” King said.
The NAIRR task force already has a private-sector presence, which is by design according to the legislation that established it.

Among its 12 members are Andrew Moore, Google Cloud’s vice president and general manager for AI and Industry Solutions; Daniela Braga, founder and CEO of AI startup Defined.ai, formerly DefinedCrowd; and Oren Etzioni, a venture partner at investment firm Madrona Venture Group who also works with new AI startups as part of an incubator fund affiliated with AI2, a nonprofit he leads that was founded by Microsoft co-founder Paul Allen.
Google has said it wants researchers who don’t need computing power from the research cloud to be able to access data in the NAIRR. For one thing, that would ensure that researchers from commercial cloud providers like Google, Amazon and Microsoft would be able to take advantage of the data flowing through the system.
Health care data giant Cerner, recently acquired by Oracle, also indicated interest in the NAIRR. The company, which helps health care customers manage patient data and is increasing its use of AI for hospital administration and patient care, emphasized public-private partnerships when it comes to how data in the resource is handled.
“It is critical that the governance structure for the NAIRR involve[s] representation from knowledgeable and relevant public-private entities for the types of data and purposes of collection that prevail,” the company wrote in an October 2021 response to a request for information by the task force. “Public policies and laws are government core competencies. However, administration of the data asset and associated technical aspects may be more suited for a public-private partner.”
Meanwhile, opponents of the project, including some advising AI policy inside the Federal Trade Commission, have raised concerns that the NAIRR will be designed primarily to enable massive-scale AI projects that, by default, would require assistance from big private-sector cloud providers.
Still, there’s no shortage of academics who see value in private cloud providers building and maintaining the NAIRR. “I would strongly urge that the NAIRR would be based on the existing cloud providers in the commercial space,” said Tom Dietterich, distinguished professor emeritus in the Collaborative Robotics and Intelligent Systems Institute at Oregon State University, during the panel discussion.

A task force working group focused on compute capabilities of the NAIRR is also weighing the possibility of working with commercial cloud providers.
During a separate session of the February task force meeting, research staff from the Science and Technology Policy Institute, a federally funded research and development center, said that partnering with established entities like commercial cloud providers could provide the NAIRR with a range of data sources, a workforce pipeline and timely updates to data architectures and data security technologies.
However, said Emily Grumbling, a research staff member with the Policy Institute, “relying on these resources could ultimately increase dependence on the private sector and for-profit based resources for the AI [research and development] ecosystem.”
Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of “Campaign ’08: A Turning Point for Digital Media,” a book about how the 2008 presidential campaigns used digital media and data.
These people started small businesses with Amazon thinking they could make it big. Now they’re battling to keep going and afraid to quit.
On its face, Amazon’s DSP program appears to be a smart business proposition for everyone involved. But many owners have found themselves barely breaking even or feeling trapped.
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
On a Veterans Affairs job board, between advertisements for public loan forgiveness and a Red Cross blood drive, is an attractive small-business opportunity for returning soldiers. Want to finally be the boss of your own future? Amazon will offer you the chance to start your own delivery company, no experience required.
This advertisement attracted the attention of one veteran when he was getting medical care at the VA following multiple military tours. He thought the idea of becoming his own boss sounded like an appealing opportunity.
The materials touted that he could make more than $75,000 and perhaps as much as $300,000 every year. The application required that you have $10,000 in startup capital, but the ad he saw also said that the fee might be waived for veterans.
He was all in. He applied and was almost immediately accepted to start his own limited liability corporation. Just like that, he was an Amazon Delivery Service Partner.

On its face, Amazon’s DSP program appears to be a smart business proposition for everyone involved. Take the delivery model proven successful by FedEx — subcontracted logistics companies like franchises — and Amazonify it. Rather than give subcontractors a geographical territory and have them just go at it (a la FedEx), provide them with specific routes. Take the algorithmic calculus that made two-day shipping possible and set strict rules for how quickly and precisely every delivery must be made. Accept none of the liability, taxes or responsibility for worker’s comp.
And in return, each individual LLC owner gets their own ready-made, money-churning delivery business supplied with Amazon’s seemingly boundless demand.
Only for the veteran and some other DSP owners interviewed for this story, that isn’t all they got in return. After more than a year working for the company, some of these Amazon delivery contractors — including a DSP owner who has filed a lawsuit against Amazon as well as the veteran who launched his business after finishing military service — are or were dependent on federal paycheck protection program loans to maintain cash flow and have grappled with profits below or at the low end of Amazon’s advertised range (below $100,000). While some of the DSP owners interviewed for this story said they’re desperate to dissolve their companies, they told Protocol that they haven’t closed up shop because they are afraid of the tens of thousands of dollars in fees they might incur when they do.
Aside from people who run successful DSPs or have since left the DSP program, everyone who currently owns or works for a DSP was granted anonymity for this story because they are afraid Amazon will retaliate. Of the people interviewed for this story, only one of them spoke favorably of the program.
In June 2018, Amazon began advertising that almost anyone could become an entrepreneur, so long as they had $10,000 in cash. The company would take applications from individuals — not groups — who were willing to start their own LLCs. Once accepted into the program, Amazon would teach how to hire drivers, lease vans, pay taxes and get insurance. It was like a Blue Apron meal kit, but for your own small business.

The new DSP program was part of Amazon’s efforts to solve its problems with last-mile delivery. The company wanted to move faster than the two-day Prime standard, and subcontractors made delivery both cheaper and more flexible. And it worked: Less than a year after first advertising for the program in 2018, one-day delivery made its first appearance in a 2019 earnings call, the beginning of a ramp-up in delivery speed that continued until the pandemic began in March 2020. By August 2020, more than 1,300 DSP companies had launched across the U.S., Canada and Europe.
Francisco Ramos, an owner based in Denver, said he believes that Amazon’s system can make owners even more than the money advertised, and that those who fail to hit the range are simply making poor business decisions. Ramos, who feels sympathy for Amazon’s business practices, believes the company’s decision-making is oriented toward maintaining delivery speeds and pleasing the customer, sometimes regardless of the consequences for specific DSPs. For example, Ramos said that Amazon sometimes added DSPs with new, less-qualified owners just to ensure that deliveries were always fast (especially during the peak months of the coronavirus pandemic), even when there was less work available for each LLC. “Their targets, you’ve gotta be barely average to hit those targets. And if you try a little harder, those targets are a piece of cake to blow right by,” he said.
But all of the other DSP owners, managers and drivers interviewed for this story, including those making profits in the middle or higher end of Amazon’s advertised range, told Protocol they see their success as born from a combination of luck in terms of delivery location and a willingness to skirt Amazon’s rules for the program. Aside from Ramos, all of the business owners and drivers interviewed for this piece see themselves as working primarily for Amazon, not for an independent small business. That mentality has added to the disappointment for workers seeking autonomy, like the veteran interviewed for this story.

“It’s not a partnership. This is working for Amazon,” the veteran said. “We DSPs are not business owners, we’re paid managers. They control every aspect.”
Ramos had the opposite perspective. “You’ve started a business, this is on you. You have a lot of people that are playing the Amazon employee mindset. But this is on you,” he said.
Both Ramos and other DSP owners interviewed for this story agreed that when the LLCs do struggle to make a profit, those owners might not have the qualifications that would help them succeed. Amazon’s materials for the program encouraged people with very limited business experience, including veterans, to apply. While Ramos credits his financial business background for helping him make his DSP a success, many people accepted into the program have backgrounds different from his. “They have no business experience,” he said about the DSP owners who struggle to make significant profits.
Whether it’s because of the design of the program or because people are running businesses without the necessary qualifications — or a combination of the two — some of Amazon’s DSP owners are frustrated and struggling financially, leading them to view the program as a trap they can’t escape.
“As we grow, we don’t always get it right, and we are committed to seeking feedback to continue improving the DSP and driver experience. This year, we made more investments than ever before in new technology, process improvements and rate increases for the DSP program — and much of the changes we made were based on the feedback and input from partners. The majority of DSPs consistently out-pace our marketed profit expectations for the program, and this year we invested $700 million to support DSP rate increases, sign-on and retention bonuses and recruiting costs,” Amazon spokesperson Alexandra Miller said in a statement to Bloomberg in October 2021. Amazon did not respond to repeated requests for comment on this story.
The DSP program is targeted toward people who want to be small-business owners and has no explicit prerequisite qualifications (aside from the ability to prove access to $30,000 in liquid assets). After applicants are accepted as DSP owners, they are first required to establish an LLC. That LLC then hires somewhere between 20 and 40 drivers on average, leases tens and sometimes even more than 100 vans from a company contracted with Amazon, purchases Amazon-branded hats, vests and other driver clothing, and installs the Amazon app on driver phones. On a day-to-day basis, Amazon tells the LLC owners and drivers what routes they will drive, how many packages they will deliver and when to make the deliveries.

But the routes each LLC receives every day can change without explanation. If drivers fail to meet delivery timelines or otherwise violate Amazon’s expectations, the company sometimes encourages the LLC owner to discipline or even fire their driver. “There’s just no legitimate way to do anything correctly at Amazon,” said Avery Barnard, a driver who worked for two different DSP companies in the last three years. “I love delivery jobs, I’ve done them a lot, and Amazon was by far and away the worst one to ever do it for.”
Amazon then rates the delivery performance for each pay period, and the LLC is paid based on that score. Most of the LLC owners and drivers interviewed for this story said that a “Fantastic Plus” score was the only ranking that led to high enough pay for the LLC to make a profit. For some LLCs, reliably achieving that score felt almost impossible, and the reasons for the rating were sometimes inscrutable.
After the DSP owner is paid by Amazon, the owner then has to pay the drivers, taxes, leases on the vans, repairs to the vans, new clothing (the physicality of the job means some drivers go through gear every couple of weeks), worker’s comp and other costs. Though Amazon directly pays the LLC for its drivers’ regular wages, it does not always explicitly compensate them for overtime hours. For DSPs where the warehouse location is far from both the headquarters and route — this is more common in rural delivery areas — the drivers usually rack up many overtime hours driving to and from the route, and Amazon doesn’t pay for those extra hours (though it does provide bonuses for excellent delivery scores, which owners could choose to use to pay the overtime), according to some owners.

Amazon told Bloomberg in 2021 that around 90% of Amazon delivery drivers finish their routes within the time allotted.
When the routes are plentiful, drivers experienced and accidents few, the DSPs can rake in hundreds of thousands of dollars based on the financial bonuses that come with “Fantastic Plus” or higher. But if a dog bites a driver or if the driver crashes a van; if the routes mysteriously disappear in the slow season; if drivers are scarce; or if new drivers can’t hack the speed and diligence required for a good score: any of those problems could immediately wipe out most of the revenue.
“At UPS or FedEx, they don’t really care, they just want the packages delivered. At Amazon, you got to take the photo, the photo has to be Instagram-quality worthy, you got to text the consumer it’s there. It’s kind of crazy how Amazon expects the most, but pays the least,” said one manager who works for a successful, high-profit DSP thriving in a major metropolitan area. The drivers Protocol spoke to said the pay at their respective DSPs equated to at least $1 per hour less than comparable rates at FedEx and UPS, and sometimes $2 or more. One DSP driver in a metropolitan area said that he and most of his co-workers would rather drive for UPS, but the jobs are infrequently available and snapped up immediately.
Despite the fact that this manager worked for a DSP owner who managed to make significant profits, he still called the program a bad deal. “I definitely wouldn’t recommend joining the program,” he said. “The amount of money you have to put in, your profit margins are going to be razor thin, or you might even lose money.”
For some financially successful DSP owners, the difference in profit and revenue makes them wonder if the effort is worth the reward. “I grossed $3 million from Amazon,” another DSP owner told Protocol. “And somehow, after I pay for everything, I end up making less than $90,000.” And of that number, almost half of it came not from Amazon, but from federal paycheck protection program loans that most DSPs were eligible for over the last two years of the pandemic. “If I hadn’t gotten a $40,000 PPP loan, my company would have had to shut down. I didn’t have enough working capital,” he said.

This owner is not the only one to depend on PPP loans to maintain cash flow. In January 2022, a DSP owner in Durham, North Carolina, alleged in a suit against Amazon Logistics that the company knew that DSP owners had to rely on PPP loans for cash flow and that Amazon actively encouraged it.
“Instead of paying DSPs fairly, Amazon relied on the federal government’s Paycheck Protection Program (PPP) to keep DSPs operational, thereby using taxpayers’ money to pay for its operations. On information and belief, nearly all DSPs are currently operating at a loss due to Amazon’s control of the DSP program and rely on PPP funds to stay afloat. Amazon knows this because it performs an annual financial review of most DSPs’ accounting records,” attorneys for Ahaji Amos, the DSP owner, wrote in the suit.
“There have been months where I have to get loans from relatives to make payroll,” one owner said.
Owners can also lose money because of driver shortages. Depending on the location, especially in rural areas, drivers are hard to find, and finding substitutes is even harder. That means that if a driver is sick or injured, the LLC might have to drop a route. “If you don’t have enough employees to run those routes and you drop a route, they fine you daily. They take a couple hundred dollars for every route you drop, every day,” the veteran owner said. Amazon has also terminated or threatened to terminate contracts with DSPs that struggle to hire over sustained periods, regardless of the money and time invested in the LLC.
Many drivers also find the job so grueling and low-paid that they last only a few months, forcing the LLC to find new workers on a regular basis. Barnard, the driver who worked for two DSPs in the last three years, said that his one-year tenure at one DSP was the longest of more than 30 drivers. “There were people that were like 25, and they were like, ‘This is not how a workplace is supposed to go,’ and they left after a couple of weeks,” he said. “Then there are a lot of older retired guys trying to do this to make some money for vacations and such, but we were doing things like XL packaging, very heavy stuff. There are people like that who came and went, couldn’t get hired anywhere else, and frankly shouldn’t have been doing that kind of job.”

Ryan Schmutzer, the owner of a logistics company founded as a DSP near Portland, Oregon, became the public face for DSP owner resentment when he and another local owner hired a lawyer and threatened to sue Amazon in June 2021 for what they described as designing a program environment that was just too financially and physically difficult.
Schmutzer jumped on the promises of the DSP program shortly after it launched. Though his new business was initially profitable, Schmutzer told Protocol that he first realized the program wasn’t designed for his benefit as an owner when Amazon pushed the rental company to charge him more for his rental vans — not because they actually cost more, but because they wanted him to pay a flat rate that Amazon had negotiated with the rental company, not the lower one Schmutzer had negotiated for himself. DSP owners are not usually allowed to rent any van of their choosing, but instead pay a preset rate for Amazon-branded vans from a specific rental company selected by Amazon.
One of the managers for a successful, urban DSP company told Protocol that they believe city locations are inherently more profitable, because there are always packed routes in very small radii, eliminating the overtime hours that accumulate when drivers have a long distance between themselves, the warehouse and the route location.
But cities pose their own problems, too. The narrow, windy streets of Portland and Seattle’s hills were difficult for drivers to navigate in the traditional vans. Schmutzer and the other LLC owner knew other types of delivery vehicles would be more appropriate for the terrain but were not allowed to switch. And some drivers described the very high number of tightly packed stops to be very physically difficult to manage, especially on tight streets.
“Vans would get stuck,” Schmutzer said. “We were required to use this vehicle, required to put it on this route. There was no exception for it.”

The conflict over the vans revealed to him what he believes is one of the central problems with the structure of the program: It was designed to serve Amazon’s needs regardless of whether it made money for the DSP owners.
When Schmutzer publicly challenged the company last year, other DSP owners emerged from the woodwork across the country, calling him to tell their own versions of the same story. Their routes seemed to appear and disappear on random whims, making it impossible to make a real profit; some felt that Amazon’s metrics for the “Fantastic Plus” score were basically impossible to achieve in their delivery area; others said their vans had been so damaged during deliveries that the cost of returning them would wipe out any money they had made. Schmutzer even flew to an Atlanta meetup for a weekend to commiserate with other struggling owners.
The owners who have succeeded in making the most money are sometimes the ones who break the rules. “We kind of bend the rules a little bit to work in our favor, and at the same time it also works in Amazon’s favor,” one driver for a successful metropolitan-based DSP said. For example, his DSP doesn’t report damage to the vans in the Amazon app, because Amazon would ground the van until the repair was finished. Instead, they fix smaller problems themselves, meaning the vehicles can remain in use. “Let’s say a lightbulb is busted in the headlight. If we were to mark that in the app it would ground it; instead we could just replace it ourselves,” he said.
“You can hate Amazon and do great,” Barnard said. “You can make money doing this. I would say, just be careful. Don’t let the stars shine in your eyes too much.”
The veteran DSP owner interviewed for this story wants to close out his business and leave the program, but he is afraid of what might happen if he does.
“They make it extremely difficult for you to get out of the program. If I were to say, ‘Hey, I can’t do this anymore.’ They write down every nick or scratch on a vehicle; the average person that tries to return the vehicle, you’re looking at well over $100,000 of damages they are going to find in your fleet,” he said. “That’s what you’re going to have to pay or we’re going to sue you. I can’t even get out.”

Amos, the woman suing Amazon Logistics in North Carolina, alleged the same in her complaint, claiming that she believes the company designed the program so that DSPs couldn’t afford to leave unless Amazon forced them out. “Amazon, through Element [the van rental company], charges $6,000 on average per Amazon-branded vehicle upon termination of DSP contracts. As such, many DSPs are left with over $120,000 in ‘exit fees,’” her attorneys wrote.
Barnard has heard the same from the DSP owners who employed him. “If you want to quit, you now own a bunch of real shitty vans that got beat to fuck, now you have this huge sunken cost,” Barnard said.
“I feel like something needs to be done about this. It’s a sham,” the veteran said. “What they’ve done is taken two years away from my life, causing me to miss out on job opportunities and things I could have been doing.”
Anna Kramer is a reporter at Protocol (Twitter: @ anna_c_kramer, email: akramer@protocol.com), where she writes about labor and workplace issues. Prior to joining the team, she covered tech and small business for the San Francisco Chronicle and privacy for Bloomberg Law. She is a recent graduate of Brown University, where she studied International Relations and Arabic and wrote her senior thesis about surveillance tools and technological development in the Middle East.
Three of Alibaba’s business partners in Russia have been sanctioned. The ecommerce giant is in an awkward position facing internal and external pressures.
Tech firms based in the U.S. and Europe have been quick to support their Ukrainian employees or suspend operations in Russia, but Chinese tech companies have been much more cautious about taking a stance.
Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
The day before bombs started raining down on Kyiv, Dmytro Romashko streamed for three hours on AliExpress, Alibaba’s global ecommerce platform. Sitting in his house, the 31-year-old Kyiv resident showcased an array of products, including electronic gadgets and decorative mugs, to thousands of Russian-speaking viewers. Romashko was in the same house when, at five o’clock the next morning, he watched with horror as Russian shells descended and fled to a bunker in only his underwear.
Romashko has worked with the Chinese ecommerce platform since 2014. He started out writing product reviews before eventually becoming one of its most prominent Russian-speaking livestream influencers. He has more than 268,000 followers on AliExpress, and each of his streams was regularly watched by thousands of viewers across Eastern Europe and Central Asia. While Romashko has never been an Alibaba employee, he serves the company’s ambition to bring its Chinese-style ecommerce craze to the world.

But now, when he’s in danger, Alibaba can’t come to his rescue. The company, like most other Chinese tech companies, has kept quiet about the war between Russia and Ukraine. And on Friday, Romashko’s post on AliExpress about the war was even deleted, citing “violence” in his content, and his account was suspended for 30 days.
Tech firms based in the U.S. and Europe have been quick to support their Ukrainian employees or suspend operations in Russia, but Chinese tech companies — still trying to become global powerhouses — have been much more cautious about taking a stance, thanks in part to the Chinese government’s insistence on staying neutral, at least officially.
Alibaba, one of the world’s best-known Chinese tech companies, has landed on the frontline of this conflict, as it has operations in both Russia and Ukraine. It even has a joint venture with three Russian investors, all of which have been sanctioned in the past week to some extent. Now, Alibaba stands to lose years of investment on both sides of the war while trying to negotiate the sanctions the U.S. and other countries put on Russia.

Eastern Europe was Alibaba’s first step toward becoming a truly global ecommerce company. After growing its domestic business for a decade, the company launched AliExpress in 2010, connecting Chinese sellers to wholesale and retail buyers overseas. Even though shipping can take weeks or even months, the low prices attracted customers around the world, especially in Eastern Europe. Russia has been AliExpress’ biggest market since 2013, due to both geological proximity and strong trade partnerships between China and Russia.
In 2018, when Jack Ma met Putin for the fourth time, the company said it was turning AliExpress’ Russia operations into a joint venture with some of Russia’s largest companies in social media and telecom: VK Group (then called Mail.ru), USM International (then the telecom giant MegaFon) and sovereign wealth fund RDIF. The Russian investors, with a combined 58.5% of the voting rights, would take control of the JV.
Today, AliExpress Russia is still a prominent ecommerce platform in the country, and the biggest among all of AliExpress’ foreign operations. According to financial numbers released on March 2, AliExpress was the most-visited online marketplace and the most-downloaded shopping app in Russia in 2021. It holds about 10% of Russia’s ecommerce market and is eyeing to grow that to 20% by 2025.

But all of Alibaba’s partners in Russia are in trouble now. RDIF, the sovereign wealth fund, has been sanctioned by both the United States and Canada. VK Group’s CEO Vladimir Kiriyenko has been sanctioned as an individual by the U.S. And USM International’s founder, Russian tycoon Alisher Usmanov, is under sanctions from the U.S., European Union and the U.K.
None of these sanctions seems to have affected AliExpress Russia yet. The company told Russia’s state news agency Sputnik News on Feb. 28 that all transactions and deliveries are working normally and will continue to do so. The global AliExpress, separate from the JV, is also expected to keep fulfilling orders from Russia, the same news agency reported. But the platform was previously planning to go public as soon as this year, a prospect that now seems much less likely.
Alibaba has not released any statement about the sanctions so far. Neither Alibaba Group nor AliExpress responded to Protocol’s repeated requests for comment. VK Group, which regularly posts about AliExpress Russia’s operations, didn’t respond to a request for comment about the sanctions’ impact on the JV.
It’s unclear how the sanctions are going to affect Alibaba, which is now only a minority investor in the JV. Even though Alibaba is publicly listed on the New York Stock Exchange, the variable interest entity (VIE) structure it uses also allows the China-based operating entity to escape U.S. compliance requirements.
“The main issue for Chinese internet tech firms is how they manage the finances of their operations in Russia,” John Lee, director of political risks consultancy East-West Futures, told Protocol. “If they are not transacting in goods/services or with individuals that have been targeted by U.S. and EU sanctions, and they are not transacting in USD, they should be able to continue business in Russia.”
However, doing so would risk being seen in the West as aiding Russia, and targeted secondary sanctions could come. That’s why most Chinese companies are hesitant to act against the sanctions, at least publicly. “I doubt that the return on their activities in the Russian market would outweigh the risk of being cut off by customers in e.g. Southeast Asia who themselves don’t want to run afoul of U.S. and EU Sanctions,” Lee said.

While Alibaba was losing control of its JV in Russia, it was also betting on Ukraine.
Ukraine is also one of AliExpress’ largest international markets. It was among the top 10 in 2019, and reported fast growth in 2020 too. According to Similarweb, AliExpress was the fifth most-visited ecommerce website in Ukraine as of January this year.
From a geopolitical standpoint, Ukraine was also rising as a potential key part of China’s global strategy. “Ukraine as China’s gateway to Europe has become more important in the context of rising European antagonism against China’s growing influence in the region,” Zongyuan Zoe Liu, an international political economy fellow at the Council on Foreign Relations, told Protocol. Some Chinese tech giants, such as Huawei and Xiaomi, also have big business interests in Ukraine, Liu added.
Last July, now-globally-famous Ukrainian president Volodymyr Zelenskyy even publicly told Xi Jinping that Ukraine could be a “bridge to Europe” for Chinese companies. And China is already helping Ukraine build several large transportation infrastructure projects.
Before the war began, Alibaba was benefitting from the warming relations between China and Ukraine. The company has been recruiting influencers in Europe for a long time to insert itself into the European ecommerce market. Ukrainian influencers are particularly in demand because many of them are fluent in Russian and can help the company reach other countries with large Russian-speaking populations.
Dmytro Romashko was one of those influencers. A trained lawyer who wanted to explore his creative side, he was drawn to the career of an ecommerce influencer because he could test gadgets and clothes and shoot review videos. His hard work streaming for hours every day was also rewarded, as he became one of AliExpress’ most-followed foreign influencers. He was once invited to go to China, and his name started to appear in Chinese media as one of the foreign faces that took China’s ecommerce innovations to the world.

Alibaba has neither made a public statement since the war began, nor provided any support to people like Romashko who worked with the platform but aren’t company employees. Romashko understands the silence and the political reasons behind it, he said, and he doesn’t blame the Chinese companies.
The silence from Chinese companies like Alibaba isn’t surprising. On one hand, it has a significant stake in the Russian joint venture that it won’t be able to withdraw anytime soon; on the other hand, Ukraine is also a rising market that Alibaba can use to tap into the broader Russian-speaking region. Losing any side could be a setback to the company’s globalization plans.
But it faces tremendous external pressure too, from the Chinese government and society. “Internally, there’s a lot of pressure on Chinese companies to not go with Russian sanctions. You see that with DiDi and possibly with Lenovo,” Maximilian Mayer, professor of international relations and global politics of technology at University of Bonn, told Protocol.
“So they have a two-side pressure,” Mayer added. “They have the Chinese government in the neck, they have part of the Chinese public in the neck, and then on the other hand, they have Western public and Western governments. So, they definitely have more difficulty finding a way” to thread that needle than Western companies would, Mayer said.
For now, Alibaba is likely gambling on staying low-profile and avoiding a decision that would annoy any side — but that can’t be a viable long-term strategy. “Even if Chinese companies do not want to take a political stance, they would still need to do the math and think about how costly it is to continue their service in either Russia or Ukraine, and the potential backlash against their business operations,” said Liu.
And Alibaba won’t be the only one. Other Chinese companies like ByteDance, which is currently listing 10 Moscow-based open positions, or Tencent, which has invested in a dozen European gaming studios, will surely face similar problems as the conflict draws out. The companies can afford the overseas loss in revenues now, while the bulk of their operations remain in China. But if they want to truly become global, they need to learn how to deal with the volatility of international politics.

While Romashko is still hiding in his bunker in Kyiv, he sometimes thinks about life after the war. A Chinese company he worked with closely in the past said it’s waiting for him to visit China when it’s possible and continue their collaboration. “After we will win, we need to build [a] new country. So I will ask my [Chinese] sellers to help with [delivering] some products to people who need it,” he said.

Correction: this story was updated on March 7, 2022 to clarify a quote from Maximilian Mayer.

Zeyi Yang is a reporter with Protocol | China. Previously, he worked as a reporting fellow for the digital magazine Rest of World, covering the intersection of technology and culture in China and neighboring countries. He has also contributed to the South China Morning Post, Nikkei Asia, Columbia Journalism Review, among other publications. In his spare time, Zeyi co-founded a Mandarin podcast that tells LGBTQ stories in China. He has been playing Pokemon for 14 years and has a weird favorite pick.
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