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Amazon sued over “taking tips that belong” to its Flex drivers

By Nithya Bose in Amazon News, posted December 8, 2022

Amazon faces a consumer protection lawsuit over the alleged stealing of customers’ tips from its Flex drivers.

District of Columbia Attorney General Karl A. Racine said the firm misled consumers that the tip money increases drivers’ compensation.

However, the retail giant is alleged to have used the money to cover the drivers' base pay, which would in turn boost its profits.

Mr. Racine said: “Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages.

“What’s more, consumers need to know where their tips are going.

“This suit is about providing workers the tips they are owed and telling consumers the truth.

“Amazon, one of the world’s wealthiest companies, certainly does not need to take tips that belong to workers.”

The suit concerns the 2015-launched Amazon Flex service that offers fast deliveries.

It says right from its outset, Amazon assured its customers the tip will be given to the drivers and urged them to do so.

The case points out that in 2016, Amazon updated the model making drivers unable to view tips they receive on each delivery.

An Amazon spokesperson said in an email that the case has no merit and noted the company had altered its model in 2019.

The representative said the compensation package ensured D.C. drivers make more than the District’s minimum wage.

As part of a settlement with the Federal Trade Commission, Amazon compensated Amazon Flex drivers in 2021.

It had accepted a nationwide injunction barring the firm from altering the way driver tips are handled without notifying drivers beforehand.

Racine said the company has yet to be held responsible for "consumer harm" breaches of D.C.'s Consumer Protection Procedures Act (CPPA).

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The legislation prohibits misleading and unfair business strategies, such as deceiving customers.

The attorney general's office is seeking civil fines for each breach of the CPPA, payment of the District's legal fees, and a court order banning the company from engaging in the activity in the future.

Racine had previously filed an antitrust suit against Amazon for marketplace monopoly.

The 2021 lawsuit argued that its practices had resulted in higher prices for consumers.

Source: The Washington Post

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