Amazon needs to pay back nearly $62 million in drivers' tips that it skimmed over the years, federal regulators said Tuesday. The Federal Trade Commission unveiled a complaint against the ecommerce giant on Tuesday alleging that Amazon's Flex program stole nearly $62 million in tips from its army of drivers between 2016 and 2019.
"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.
News of the settlement comes as Amazon founder Jeff Bezos said he was stepping down as CEO, capping off a year of meteoric growth for the ecommerce company.
Launched in 2015, Amazon Flex allowed ordinary people to sign up for shifts using their personal car to deliver Amazon packages. Amazon advertised that drivers could make $18 to $25 an hour in the program and earn tips for certain deliveries, according to the FTC complaint. The company told drivers that it would "pass to you 100% of tips you earn"; it also told customers that "100% of your tips are passed on to your courier," according to the FTC complaint.
Soon after Amazon Flex launched, however, the company started skimming drivers' tips, the FTC claims. In late 2016, the company secretly switched to a variable-pay system, where the amount drivers earned would fluctuate based on an internal algorithm, regulators allege. Under this system, the complaint alleges, Amazon could advertise a payment of "$18-$24" for a particular delivery, but if a customer tipped $6, Amazon would only pay the driver $12, for an $18 total payment.
At that point, "Amazon decided to obscure from drivers that it was reducing their pay, and began reporting their earnings as a single lump sum that hid any distinction between customer tips and pay from Amazon," the complaint alleges. "Based on the information Amazon provided, drivers could not tell whether Amazon had contributed its minimum for the delivery block or a lesser amount, nor could drivers tell the amount of any customer tip."
Amazon also discouraged customers from tipping in cash, with the app saying that "cash is not accepted upon delivery."
https://www.cbsnews.com/news/amazon...OzHH9Zj6M12Rffgn6h5NBZ-ilVOvNxA9jm9KvBIHmm5W0
"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.
News of the settlement comes as Amazon founder Jeff Bezos said he was stepping down as CEO, capping off a year of meteoric growth for the ecommerce company.
Launched in 2015, Amazon Flex allowed ordinary people to sign up for shifts using their personal car to deliver Amazon packages. Amazon advertised that drivers could make $18 to $25 an hour in the program and earn tips for certain deliveries, according to the FTC complaint. The company told drivers that it would "pass to you 100% of tips you earn"; it also told customers that "100% of your tips are passed on to your courier," according to the FTC complaint.
Soon after Amazon Flex launched, however, the company started skimming drivers' tips, the FTC claims. In late 2016, the company secretly switched to a variable-pay system, where the amount drivers earned would fluctuate based on an internal algorithm, regulators allege. Under this system, the complaint alleges, Amazon could advertise a payment of "$18-$24" for a particular delivery, but if a customer tipped $6, Amazon would only pay the driver $12, for an $18 total payment.
At that point, "Amazon decided to obscure from drivers that it was reducing their pay, and began reporting their earnings as a single lump sum that hid any distinction between customer tips and pay from Amazon," the complaint alleges. "Based on the information Amazon provided, drivers could not tell whether Amazon had contributed its minimum for the delivery block or a lesser amount, nor could drivers tell the amount of any customer tip."
Amazon also discouraged customers from tipping in cash, with the app saying that "cash is not accepted upon delivery."
https://www.cbsnews.com/news/amazon...OzHH9Zj6M12Rffgn6h5NBZ-ilVOvNxA9jm9KvBIHmm5W0
