Amazon stole $62 MILLION in tips from delivery drivers and the fed is telling them to give it back
· Feb 4, 2021 ·

Here's another story of giant corporations totally (not) looking out for the little guy.

The Federal Trade Commission revealed this week that Amazon was making some pretty big bucks stealing tips meant for its drivers.

Apparently, after Amazon started letting average Joes use their own cars to deliver products for some side money, it also decided to skim some $62 MILLION of that hard-earned cash out of the virtual tip jar.

"Rather than passing along 100 percent of customers' tips to drivers, as it had promised to do, Amazon used the money itself," said Daniel Kaufman, the acting director of the FTC's Bureau of Consumer Protection.

Drivers in the "Flex" program were told they could make $18-$25 an hour for their services, and that they would "pass to you 100% of tips you earn." Amazon also told customers that "100% of your tips are passed on to your courier."

But Amazon quietly enabled a new algorithm that would change how much a driver earned by counting the tips toward the driver's wages. While the drivers thought they'd be getting $18-$25 an hour plus tips, Amazon would dock their pay depending on what a tip was.

Say you worked an hour and earned $18. If you had no tips, Amazon would pay the $18. If you got $7 in tips, however, Amazon would subtract that and only pay you $11 from their coffers, technically giving you $18 in the shadiest way possible.

To hide this from the drivers, Amazon also switched to a lump sum payment that prevented drivers from seeing their tips.

Oh, and they also told customers not to tip in cash.

Hundreds of drivers complained to Amazon that their pay dipped when the new algorithm was implemented and in 2019 the FTC informed the company it was being investigated.

Amazingly, Amazon quickly changed back to its original pay model!

"[T]his cannot be the only action we take to protect workers and families from dominant middlemen," said FTC commissioner Rohit Chopra. "The FTC will also need to carefully examine whether tech platforms are engaging in anticompetitive conduct that hoodwinks workers and crushes law-abiding competitors. While is one of the largest, most powerful, and most feared firms in the world, the company cannot be above the law."

Ready to join the conversation? Subscribe today.

Access comments and our fully-featured social platform.

Sign up Now
App screenshot