July 15, 2024


It's the Technology

Washington DC sues Amazon, claims it stole tips • The Register

Washington DC sues Amazon, claims it stole tips • The Register

Amazon again stands accused of stealing delivery drivers’ tips, and using the money to cut into workers’ pay, this time in a lawsuit filed by Washington DC’s Attorney General Karl Racine on Wednesday. 

Amazon Flex allows folks to make money by delivering packages for it using their own cars. The service has been running since 2015 and the drivers are considered independent contractors. Adverts recruiting workers claim they can make anywhere from $18 to $25 an hour, not including tips.

But Amazon is accused of sneakily deducting a “large portion” of the tips drivers are given from their hourly wages in 2016, meaning those drivers didn’t actually receive the extra money they are owed, Racine claimed. The e-commerce giant is not only stealing from drivers, it’s also lying to shoppers who believe 100 per cent of the tips they pay are going toward delivery drivers in Washington DC, the lawsuit alleges. 

“Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages,” Racine said in a statement. “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. Amazon can and should do better.”

In 2019, Amazon was sued by the FTC, America’s consumer watchdog, for allegedly cheating drivers out of more than $61.7 million in payments. In 2021, Amazon settled the case and promised to return millions of bucks to more than 140,000 delivery contractors. The FTC claimed Amazon stopped stealing people’s tips only when the biz titan realized it was under federal investigation.

As part of that settlement, the mega-corp admitted no wrongdoing. But the DC AG isn’t happy about that. “[Amazon] has thus far escaped appropriate accountability, including any civil penalties, for consumer harm,” Racine said. Under the District of Columbia’s Consumer Protection Procedures Act (CPPA), companies are prohibited from misleading consumers by withholding information about their products or services, and it’s under this legislation that he hopes to hit Amazon for shenanigans regarding tips.

The attorney general claims Amazon violated CPPA by lying to shoppers about tipping delivery drivers, specifically by boasting that 100 per cent of the money would go to workers. Racine wants judges to sanction Amazon for every instance it violated CPPA in DC, and to issue a court order that would ensure the multi-billion-dollar multinational can never take drivers’ tips again.

Amazon downplayed Racine’s lawsuit and said it had already paid back money owed to drivers as part of the wider FTC settlement. 

“Nothing is more important to us than customer trust,” Maria Boschetti, a Amazon PR spokesperson, told The Register in a statement. “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.” ®