Amazon stole tips from delivery drivers to boost company profits, lawsuit says

Amazon stole tips from its delivery drivers to increase profits, according to a lawsuit filed by the attorney general for the District of Columbia.

The Seattle-based company duped buyers in Washington, D.C. into believing they were tipping delivery workers when in actuality their tips were used to lower labor costs and boost company profits, according to a Dec. 7 news release from the Office of the Attorney General.

In 2015, when the company rolled out Amazon Flex, a service that offered timely deliveries, it told customers that 100% of tips would go to drivers, according to the release.

However, a year later, the company — one of the largest in the world — altered its payment model so that a “large portion” of the tips, instead of being dispensed to drivers, was siphoned off to pay wages that were already owed to drivers. Most Amazon Flex drivers earn between $18 and $25 per hour, according to the company.

Rather than inform drivers of the changes, Amazon altered its app so that workers could not see how much individual buyers tipped, the release stated.

“Nothing is more important to us than customer trust,” Maria Boschetti, an Amazon spokesperson, said in a statement provided to McClatchy News. “This lawsuit involves a practice we changed three years ago and is without merit — all of the customer tips at issue were already paid to drivers as part of a settlement last year with the FTC.”

That settlement, reached in February 2021, stipulated that the company would pay over $61 million to the Federal Trade Commission, a sum that was later reimbursed to drivers.

But the lawsuit argues that, despite the settlement, Amazon had “escaped appropriate accountability, including any civil penalties, for consumer harm.”

The suit seeks civil penalties for violations of the District of Columbia’s consumer protection law in addition to a court order ensuring that Amazon will not be able to participate in the same misleading tipping practice again, according to the release.

The e-commerce company, founded by Jeff Bezos in 1994 and now helmed by Andy Jassy, is facing other lawsuits this year, including a nearly $1 billion class action suit claiming Amazon favors its own products as well as a false advertising suit.

Amazon has brought in $469.8 billion in revenue so far in 2022, according to Forbes, making it one of the wealthiest companies in the world.

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