More than a year has passed since federal authorities ordered Amazon to repay about $62 million in drivers’ tips that the company allegedly stole over the years. Now, a federal prosecutor is demanding that the e-commerce giant reimburse customers who, according to him, were similarly mislead during the process.
Attorney General Karl Racine of Washington, D.C., filed a lawsuit against Amazon on Wednesday, accusing the e-commerce giant of skimming tips from delivery workers and misled customers about who was receiving gratuities.
“Consumers must understand where their tips go. This lawsuit is about paying workers the tips they are owed and being honest with customers “Racine stated in a declaration.
FTC action against Amazon Flex
In February 2021, the Federal Trade Commission ordered Amazon to pay $61.7 million to drivers who were denied tips from customers between 2016 and 2019.
According to this lawsuit, Amazon Flex was introduced in 2015 so that regular individuals might use their own vehicles to distribute products on Amazon’s behalf. According to the agency at the time, the corporation said drivers could earn between $18 and $25 per hour and receive tips for specific deliveries. According to the FTC lawsuit, Amazon reportedly assured drivers that it would “pass on 100 percent of the tips you earn” and told customers that “100 percent of your tips are passed on to your courier.”
The FTC alleges that shortly after Amazon Flex’s launch, the business began skimming drivers’ tips. Regulators allege that in late 2016, the firm shifted in secret to a variable-pay system in which drivers’ earnings could fluctuate based on an internal algorithm. The authorities stated that under this arrangement, Amazon may advertise a payment of “$18-$24” for a given delivery, but if a consumer tipped $6, Amazon would pay the driver only $12 (for a total payment of $18).
Amazon prohibited users from leaving cash tips by stating in the app that “cash is not accepted upon delivery.”
As part of the 2021 settlement, Amazon did not admit liability.
In search of “accountability”
As part of its deal with the FTC, Amazon later reimbursed the Amazon Flex drivers, but “it has thus far evaded appropriate accountability, including any civil penalties for consumer injury,” Racine stated in his complaint filed in D.C. superior court.
Amazon, when contacted for comment, dismissed the most recent legal complaint.
“This lawsuit involves a practice we changed three years ago and is meritless – all of the customer tips at issue were previously paid to drivers as part of a settlement with the FTC last year,” a representative said in an email.
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