Tuesday, April 23, 2024

Amazon ordered to reimburse $ 61.7 million after pocketing tips from delivery drivers

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The U.S. Federal Trade Commission forced Amazon to pay some of its delivery drivers $ 61.7 million to settle allegations that the e-commerce giant pocketed tips left by its customers.

The FTC said that Amazon, whose revenues are expected to exceed $ 380 billion in 2020, withheld the amount over the course of two and a half years, only stopping once he found out he was under investigation.

The issue was with workers delivering packages through Amazon’s Flex program, an on-demand Uber-style economy service where workers are paid per “block,” typically lasting around three or four hours. .

Like other gig platforms, Flex Drivers use their own vehicles and are responsible for their own expenses. Many Flex employees are used to fulfill same-day grocery orders through Prime Now or Amazon Fresh, for which customers can tip through the Amazon app.

The FTC said that according to the Amazon ad, Flex drivers should “receive 100% of the tips you earn,” in addition to a minimum of $ 18 to $ 25 in earnings per hour.

But starting in 2016, the FTC alleged, Amazon began using customer advice to build up minimum income, without notifying workers of the change. The practice ended in 2019, the FTC said.

“Rather than passing 100% of customer advice to drivers, as it had promised, Amazon used the money itself,” Daniel Kaufman, acting director of the Consumer Protection Bureau of the FTC.

“Our action today returns the tens of millions of dollars in tips that Amazon has embezzled to drivers, and requires Amazon to obtain permission from drivers before changing its treatment of tips in the future.”

Amazon has not disclosed the number of Flex drivers operating on its network, but analysts believe the company has increasingly relied on casual labor as it seeks to manage high pandemic demand. .

“While we disagree that it was unclear how we reported payment to drivers, we have added further clarification in 2019 and are happy to leave this issue behind,” he said. Amazon said.

“Amazon Flex delivery partners play an important role in serving customers every day, which is why they earn some of the best in the business at over $ 25 an hour on average.”

In a call with reporters, Acting FTC President Rebecca Kelly Slaughter said the commission was “eagerly seeking” crime evidence from all concert platforms, and called on Congress to give it more powers to punish companies that distort profits.

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