Amazon has put $3.95 million to resolve a lawsuit accused of subsidizing labor costs by stealing tips received by drivers to cover a portion of employee base wages. We agreed to pay, DC Attorney Brian L. Schwalb announced on Friday.
According to Schwarb, between 2016 and 2019, Amazon misunderstood Washington, DC consumers, and that all the tips it provided will be sent to Amazon Flex Drivers, employees who deliver packages in their own cars. I guaranteed that.
Schwarb's office argued that by diverting its millions of dollars in tips, Amazon could save its own operating costs and thus increase its profits.
“Companies are misleading customers to steal tips for workers and make profits, cheating on consumers, employees and competitors who play with rules,” Schwarb said.
In a statement to Fox News Digital, Amazon said it disagreed with the allegations, saying that Amazon Flex has evolved since.
“For nearly a decade, Amazon Flex has been able to make extra money from its distribution partners on their schedules,” says Amazon spokesman Steve Kelly. “Like a successful program, Amazon Flex has evolved over time. The lawsuit relates to practices that were changed over five years ago. We continue to oppose these allegations. But we are happy to have a problem behind us.
When Amazon Flex was launched in 2015, consumers were able to tilt their delivery drivers at check-out. This said 100% of the hints will be sent to the driver.
The lawsuit states that, instead of Amazon changing its driver payment model the following year and allowing tips to increase drivers' total compensation, the company cites the base wages of employees that Amazon had already committed to paying drivers. They claimed they used it to cover it.
According to the Federal Trade Commission, changes to payment models have not been disclosed to drivers or consumers, and Amazon could continue to take tips until 2019 when it “recognized the 2019 FTC survey.” Masu.
The company was accused of stealing more than $1 million in tips to cover labor costs.
As part of the 2021 settlement with the FTC, Amazon spokesman at the time said all customer tips in question were ultimately paid to the driver.
Aside from a settlement with the FTC only, the Attorney General's Office He filed a lawsuit Please note that additional penalties have been guaranteed to block illegal activities due to injunctive relief and civil penalties.
“It's not enough to simply return malicious benefits after being caught,” Schwarb said. “In fact, stopping fraud in the first place has to have meaningful consequences. Especially when living costs are becoming more and more difficult, my office is to have hardworking district residents receive every penny of revenue. We continue to guarantee that consumers are confident that they are not misunderstood.”
According to the settlement, Amazon has denied all claims and claims.
“Amazon claims to have achieved a customer's honest, complete, clear and accurate expression regarding driver tips,” the settlement states.
According to the terms of the settlement, Amazon will pay $3.95 million, including a $2.45 million fine and a $1.5 million cost.
The company has also agreed to maintain transparent transformation practices.
“If Amazon uses hints for purposes other than increasing driver coverage, the company needs to make clear disclosures about how the hints are used on both the website and the app.” The settlement states.
Daniella Genovese of Fox News contributed to this report.
