FTC States Amazon Took $62M Away In Tips From Drivers
Amazon is coughing up $62 million to settle charges that it allegedly took tips away from its delivery drivers.
The Federal Trade Commission reveals that Amazon dud not release tips to drivers for over two years, and continued to hold on to the money until they became aware of an FTC investigation.
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“In late 2016, the FTC alleges, Amazon shifted from paying drivers the promised rate of $18–25 per hour plus the full amount of customer tips to paying drivers a lower hourly rate, a shift that it did not disclose to drivers. Amazon used the customer tips to make up the difference between the new lower hourly rate and the promised rate. This resulted in drivers’ being shorted more than $61.7 million in tips.”
ABC News reports that the drivers were working for Amazon’s Flex program, where the company hires independent contractors to handle deliveries of Prime Now and Amazon Fresh orders, and some packages as well. They were supposed to pay $18 to $25 per hour, plus tips. However, the pay was decreased with the tips making up for it, while Amazon pocketed the rest.
“Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” said Daniel Kaufman, the Director of the FTC’s Bureau of Consumer Protection. “Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers’ permission before changing its treatment of tips in the future.”
