On Tuesday, the US Federal Trade Commission (FTC) said the settlement figure represents how much drivers allegedly lost in tips over a two-and-a-half-year period.
Amazon Flex is an offshoot of the company s standard delivery infrastructure. Under Flex, drivers can sign up and use their own vehicles to deliver packages on behalf of the company, and customers are able to tip their drivers if they wish.
According to the US watchdog, Amazon misrepresented the job by telling drivers they would receive and keep all of their tips and also told customers that any tips awarded would go straight to the driver.
FTC says Amazon took $62 million in tips from drivers, will be paying them back
Steven Senne/AP
FILE - In this Oct. 1, 2020 file photo, an Amazon Prime logo appears on the side of a delivery van as it departs an Amazon Warehouse location in Dedham, Mass. Amazon is paying nearly $62 million to settle charges that it took tips from its delivery drivers. The Federal Trade Commission said Tuesday, Feb. 2, 2021, that for more than two years, Amazon didnât pass on tips to drivers, even though it promised shoppers and drivers it would do so. (AP Photo/Steven Senne, File)
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Amazon Flex allows drivers to make deliveries with their personal vehicles, and they are classified as personal contractors.
Amazon regularly advertised that drivers participating in the Flex program would be paid $18-25 per hour, according to the FTC s complaint. Some statements by Amazon included: “You will receive 100% of the tips you earn while delivering with Amazon Flex.”
The FTC claimed Amazon began paying drivers lower hourly rates in 2016 and used the customer tips to make up the difference.
The federal agency also alleged that the retail giant intentionally failed to notify drivers of the changes.
The settlement terms also indicated Amazon will be prohibited from misrepresenting a driver’s pay rate, how much of tips will be paid to them and whether the amount paid by a customer is a tip. The company will also be prohibited from making changes to how a driver’s tips are used without the driver’s consent.
Amazon Kept $62 Million In Tips Intended For Drivers, FTC Says
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.
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.