Amazon to pay US$62 million to settle charges for not passing on tips

WION Web Team
Washington, United States Published: Feb 03, 2021, 04:28 PM(IST)

Amazon didn't pass on tips taken from customers to drivers for more than two years Photograph:( AFP )

Story highlights

According to the Federal Trade Commission (FTC), even though it promised shoppers and drivers, Amazon didn't pass on tips to drivers for more than two years

In order to settle charges for not passing on tips to drivers, Amazon is going to pay around US$62 million.  

According to the Federal Trade Commission (FTC), even though it promised shoppers and drivers, Amazon didn't pass on tips to drivers for more than two years.  

The tech giant didn't stop taking the tips until 2019, when the company found out about the FTC's investigation. The theft did not go unnoticed by Amazon's drivers. Many expressed anger and confusion to the company but, rather than coming clean, Amazon took several steps to mislead its drivers and conceal the theft by sending them canned responses that repeated the company's lies. 

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Founded in 2015, Amazon's Flex business allowed people to deliver Amazon packages through their own cars. The drivers were independent workers and not Amazon employees. 

At first, Amazon promised workers that they would be paid US$18 to US$25 per hour for their services. They were to also receive 100 per cent of tips given to them by the customers on the app, according to the complaint. But in 2016, the company started paying drivers a lower hourly rate and used the tips to make up for the difference. The FTC said, Amazon didn't disclose the change to drivers, and the tips it took from drivers amounted to US$61.7m ($85.8m). 

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In a statement, Seattle-based Amazon.com Inc. said that the way it reported pay to workers was clear. But the company said it "added additional clarity in 2019" and is "pleased to put this matter behind us." 

The FTC said the money Amazon will pay for the settlement will go to delivery drivers whose tips were taken. 

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