Who Benefits From Same-Day Amazon Delivery? Not Small Towns

Same-day delivery to New York? One more way web culture is becoming urban culture.


Faster than a 2-day delivery, more powerful than a streaming video: the Financial Times reports today that Amazon aims to greatly expand the number of cities it can offer same-day delivery to. It's a huge expansion of a program begun in Fall 2009, and it'll require huge institutional brawn -- brawn that they're gaining through a sort of quid pro quo with individual states.

That is: Amazon will start paying sales tax, and in return, the state will endorse the construction of huge warehouses. In New Jersey, for example, the state will back the construction of two just outside New York. But it's happening throughout the country, and Slate's Farhad Manjoo rattles them off in a post from this morning:

Amazon is investing $130 million in new facilities in New Jersey that will bring it into the backyard of New York City; another $135 million to build two centers in Virginia that will allow it to service much of the mid-Atlantic; $200 million in Texas; and more than $150 million in Tennessee and $150 million in Indiana to serve the middle of the country. Its plans for California are the grandest of all. This year, Amazon will open two huge distribution centers near Los Angeles and the San Francisco Bay Area, and over the next three years it might open as many as 10 more in the state. In total, Amazon will spend $500 million and hire 10,000 people at its new California warehouses.

The entire FT article is pitched as a battle between big, cheap, sales-tax-avoiding Amazon and small businesses -- specifically, Rita Maggio's Booktowne, situated charmingly on Manasquan, NJ's Main Street. Maggio protested Amazon's sales-tax-avoidance, but the article casts the whole thing as a pyrrhic victory. Now that her customers can buy books on Amazon, why would they order from her?

And maybe that's true. But the folks really left out here don't live anywhere close to the Acela. Small towns and mid-sized cities in the American South, Midwest and Mountain West may reap the tax benefits of Amazon's defeat, but they'll never see the productivity gains that same-day delivery of a huge inventory will bring. Cities -- where consumers and technology are disproportionately distributed -- benefit from the web. At the moment, neither Zipcar nor Groupon play in Peoria.

One day, all companies that sell things through hypertext won't be called tech companies. TechCrunch won't cover them. They'll just be companies. And when Amazon is established and decades-old and has reformed its supply chain many many times, perhaps rural America may benefit from it.

But until then, to take the greatest advantage of the web, you have to make your home in a city.