Amazon will pay over $61.7 million to settle allegations that it refused to pay Amazon Flex drivers all of the tips given by customers for more than two years. The Federal Trade Commission (FTC) revealed the settlement in a statement.
The FTC says the money will go towards compensating the drivers. According to the FTC, Amazon in 2015 had advertised that a program called Flex would pay independent drivers $18 to $25 an hour to make deliveries and that they would receive 100% of any tips. However, in 2016 Amazon “secretly reduced its own contribution to drivers’ pay,” according to the FTC complaint.
“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 statement.
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“Amazon used the customer tips to make up the difference between the new lower hourly rate and the promised rate,” the FTC said in a statement. The company then put an end to the payment model in August 2019 after the FTC began an investigation into the matter.
“In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line,” according to a statement by Commissioner Rohit Chopra. He is also asking the FTC to examine whether workers need protection from “other dominant middlemen”.
Amazon had also discouraged customers from tipping in cash, with the app saying that “cash is not accepted upon delivery”.
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