Amazon Sued for Allegedly Stealing Driver’s Tips, Launches New Gamified Tipping System

This vacation season, Amazon says it is going to pay its supply employees an additional $5 each time a buyer tells their Alexa sensible speaker to thank their driver. That seems like a pleasant gesture till you understand Amazon’s allegedly spent years redirecting or stealing suggestions meant for a lot of of these exact same drivers.

Those tip stealing allegations are the central declare in a brand new lawsuit filed by Washington D.C. Attorney General Karl A. Racine, who alleges the corporate engaged in an “illegal scheme” to withhold suggestions from its FLEX supply drivers and trick customers within the course of. Those withheld suggestions, based on Racine, had been then used to subsidize the corporate’s personal labor prices.

Racine’s claims hinge on a elementary change in Amazon’s FLEX tipping coverage. In 2015, when the freelance supply program launched, customers had been inspired to tip their drivers at checkout through a default offered tip quantity. At the time, Amazon customers had been instructed 100% of these suggestions would find yourself of their drivers’ pocket. Sounds easy sufficient, nevertheless, like most economics associated to so-called gig work, Amazon was about to shroud its tipping system in complexity.

In 2016, based on the grievance, Amazon allegedly altered its tipping mannequin so drivers wouldn’t immediately obtain their tip. Instead, a portion of a driver’s tip would funnel immediately again to Amazon, which might then use these funds to pay a portion of the pre-tipped wage Amazon promised to pay its employees. Amazon, based on the grievance, diverted a portion of these tricks to “subsidize its own labor costs without actually increasing driver compensation.” All the whereas, the grievance alleges, Amazon was nonetheless telling clients 100% of their suggestions had been going to drivers.

Amazon addressed its tip manipulation in a 2021 settlement with the Federal Trade Commission. In that case, Amazon agreed to pay the company $61.7 million to account for the swindled funds. The FTC began paying out impacted drivers final yr by the use of 139,507 checks and 1,621 PayPay funds. Average impacted drivers obtained $422, as a part of the settlement, with almost 20,000 drivers receiving payouts in extra of $600. At the time, an Amazon spokesperson instructed Gizmodo they disagreed with claims suggesting their tipping was unclear however had been nonetheless “pleased to put this matter behind us.”

Those payouts, based on Racine, merely weren’t sufficient for the reason that multi-trillion-dollar firm “has thus far escaped any other consequences.” With the brand new go well with, Racine needs to drive Amazon past paying restitution to drivers and as a substitute cough up civil penalties for deceiving its clients and violating D.C.’s Consumer Protection Procedures Act. Those shopper protections prohibit corporations from deceptive customers or making misrepresentations. Additionally, the lawsuit requires a courtroom order barring Amazon from participating in these practices sooner or later. 

“When a company is caught stealing from its workers, it is not enough for the company to repay the amount stolen,” the lawsuit reads. “Stealing from workers is theft, and significant penalties are necessary to strongly disincentivize this unlawful conduct.” 

Amazon spokesperson Maria Boschetti acknowledged the lawsuit in an announcement despatched to Gizmodo. 

“Nothing is more important to us than customer trust,” Boschetti mentioned. “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.” 

All of which may be true, however Amazon’s assertion nonetheless fails to grapple with Racine’s declare that the corporate engaged in a marketing campaign to cover the reality concerning the tipping from its clients and employees.

“This suit is about providing workers the tips they are owed and telling consumers the truth, Racine said in a statement. “Amazon, one of the world’s wealthiest companies, certainly does not need to take tips that belong to workers. Amazon can and should do better.”