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Amazon Should Pay Fines for Withholding Driver Tips, DC Attorney General Says

In a lawsuit filed Wednesday, the AG says the tip money was used to defray the company's costs for its Amazon Flex service.

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Amazon repaid the allegedly missing tips in a settlement with the FTC but may still face fines.
Getty Images

Amazon tricked customers into paying tips that didn't all go to its Flex drivers, Karl Racine, the attorney general of the District of Columbia, said in a lawsuit filed Wednesday. The money was instead allegedly used to offset payments Amazon had already promised to the drivers.

Amazon already settled similar claims last year with the Federal Trade Association, but Racine said the matter still needs attention from a court. Amazon wasn't required to pay any civil penalties or ordered by a court not to repeat the practice, the attorney general's office said in a press release.

"This suit is about providing workers the tips they are owed and telling consumers the truth," said Racine in a statement. "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."

Lawyers working for Racine's office said residents of Washington DC tipped drivers millions of dollars while the practice was ongoing between 2016 and 2019. The suit seeks civil penalties under a DC consumer protection law.

Amazon spokesperson Maria Boschetti said that the company voluntarily changed its earning model in 2019 and agreed to an injunction for 20 years barring Amazon from changing its tipping model unless it notifies drivers and gets their consent. She added that the company gave money for the alleged missing tips to the FTC, which disbursed it to the drivers.

"Nothing is more important to us than customer trust. 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."

Amazon also announced an Alexa feature Wednesday that would let customers send their appreciation to delivery drivers by saying, "Alexa, thank my driver" to certain Echo devices or their Alexa or Amazon shopping app after receiving a package. The delivery drivers, including Flex drivers, will also get an extra $5 from Amazon for each of the first million thank-you messages received.

Flex drivers use their own cars to deliver packages and work as independent contractors.