It’s been over a year since federal regulators ordered Amazon to return nearly $62 million in driver tips allegedly skimmed over the years. Now a government prosecutor wants the e-commerce giant to compensate customers who he says were also cheated in the process.
Washington, DC Attorney General Karl Racine announced a lawsuit against Amazon on Wednesday that accuses the e-commerce giant of stealing tips from the e-commerce giant’s delivery drivers and misleading customers about who received tips.
“Consumers need to know where their tips are going. This lawsuit is about providing workers with the tips they are owed and telling consumers the truth,” Racine said in a statement.
FTC Lawsuit Against Amazon Flex
In February 2021, the Federal Trade Commission required Amazon to pay private drivers $61.7 million for customer tips 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 Amazon’s behalf. The company claimed drivers could earn $18 to $25 an hour and receive tips for certain deliveries, the agency said at the time. Amazon also told drivers that it would “pass on 100% of the tips they earn” and told customers that “100% of your tips are passed on to your courier,” according to the FTC complaint.
However, shortly after the launch of Amazon Flex, the company began stealing 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, the government said, Amazon could advertise a payment of “$18-$24” for a particular delivery, but if a customer tipped $6, Amazon would pay the driver just $12 (for a total payment of $18). .
Amazon also discouraged customers from tipping cash, with the app saying “cash is not accepted upon delivery.”
Amazon did not admit wrongdoing as part of the 2021 deal.
Looking for “accountability”
While Amazon later reimbursed Amazon Flex drivers as part of its settlement with the FTC, “It has thus far escaped proper accountability, including civil penalties, for consumer damages,” Racine said in filing his lawsuit. in the DC superior court.
Reached for comment, Amazon dismissed the latest legal filing.
“This lawsuit involves a practice we changed three years ago and is without merit: all tips from the customers in question were already paid to the drivers as part of a settlement last year with the FTC,” a spokesperson said in an email. .
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