Feb 2, 2021 - Technology

Amazon to pay $62M to settle claims it lifted delivery driver tips

A photo of a smartphone depicting the Amazon logo
Photo: Igor Golovniov/SOPA Images/LightRocket via Getty Images

Amazon will pay more than $61.7 million to settle charges from the Federal Trade Commission that it did not pay drivers in the Amazon Flex delivery service their full share of tips over a two and a half year period.

The big picture: Amazon faces a rising chorus of accusations that it underpays and overworks its warehouse workers and delivery drivers.

What's happening: The FTC filed an administrative complaint against Amazon and Amazon Logistics, which the agency says told Amazon Flex delivery drivers and customers that the drivers would be paid the full amount of any tips added to a delivery.

  • "Rather than passing along 100 percent of customers’ tips to drivers, as it had promised to do, Amazon used the money itself," Daniel Kaufman, Acting Director of the FTC’s Bureau of Consumer Protection, said in a release.
  • "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."

Details: The agency says it received hundreds of driver complaints after Amazon changed its pay plan without notifying drivers, and did not stop until the company became aware of the FTC investigation in 2019.

  • FTC commissioners voted unanimously to approve the consent decree Amazon enters as a result of the settlement.

The other side: "While we disagree that the historical way we reported pay to drivers was unclear, we added additional clarity in 2019 and are pleased to put this matter behind us," an Amazon spokesperson said.

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