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Amazon accused of stealing tips from delivery drivers

It’s been more than a year since federal regulators ordered Amazon pay approximately $62 million It’s reportedly skimmed over the years in drivers’ tips. Now, a government prosecutor wants the e-commerce giant to compensate customers, who he says were also misled in the process.

Washington, DC: Attorney General Carl Racine on Wednesday announced a lawsuit against Amazon accusing the e-commerce giant of stealing tips from the e-commerce giant’s delivery drivers and deceiving customers about who gets gratuities. Used to be.

“Consumers need to know where their tips are going. This suit is about employees providing those tips and telling consumers the truth,” Racine said in a statement.

FTC Suit Against Amazon Flex

In February 2021, the Federal Trade Commission asked Amazon to pay $61.7 million to drivers who denied tips from customers between 2016 and 2019.

According to that complaint, Amazon Flex was launched in 2015 to allow ordinary people to use their own vehicles to deliver packages on behalf of Amazon. The company claimed drivers could earn $18 to $25 an hour plus tips for some deliveries, the agency said at the time. Amazon also told drivers it would “pass 100% of the tips you earn on” and told customers that “100% of your tips are passed on to your courier,” according to the FTC’s complaint.

Soon after Amazon Flex launched, however, the company began skimming drivers’ tips, the FTC claims. In late 2016, the company secretly switched to a variable-pay system in which drivers’ earnings could fluctuate based on an internal algorithm, regulators allege. Under that system, Sarkar said, Amazon could advertise a payment of “$18-$24” for a particular delivery, but would pay an Amazon driver only $12 ($18 if the customer paid $6). for the total payment).

Amazon also discouraged customers from tipping in cash, saying the app “does not accept cash on delivery.”

Amazon did not admit wrongdoing under the 2021 agreement.

Seeking “Accountability”

While Amazon later reimbursed Amazon Flex drivers as part of its settlement with the FTC, “it has so far escaped appropriate accountability, including any civil penalties, for consumer damages,” Racine wrote in its filing to D.C. Superior Court. Registering the complaint said.

Reached for comment, Amazon dismissed the latest legal filing.

A spokesperson said in an email, “This lawsuit involves a practice we changed three years ago and is without merit — all customer tips were already paid to drivers as part of a settlement last year with the FTC.” was done to.”

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