The legal professional basic of Washington D.C. is suing Amazon for allegedly stealing suggestions from supply drivers. The workplace of District of Columbia AG, Karl Racine, claims the e-commerce large misled prospects who had been beneath the impression that suggestions would go to supply drivers, whereas Amazon was allegedly utilizing these gratuities to cowl supply driver pay, as Bloomberg studies.
The lawsuit comes on the heels of a settlement that Amazon reached with the U.S. Federal Trade Commission in 2021, after the company filed swimsuit in opposition to Amazon for these tip-stealing practices. The FTC swimsuit mentioned Amazon was not, certainly, passing on the complete quantity that prospects gave to Flex drivers, regardless of clearly stating that “100% of tips are passed on to your courier.” Amazon by no means did agree that its pay practices had been unclear, however ended up paying $61.7 million to settle the case, and mentioned the cash would go to its Amazon Flex drivers. After the settlement, the FTC despatched out checks and funds through PayPal to drivers who had their suggestions taken away; the best returned quantity totaled $28,255.
The legal professional basic is now bringing one other swimsuit in opposition to Amazon, looking for civil penalties for violating shopper safety statutes. The AG is citing final yr’s settlement as proof that Amazon is utilizing misleading and unlawful practices to extend earnings, however Amazon considers the matter closed because of the settlement.
The FTC discovered Amazon was holding driver suggestions from late 2016 via late 2019, and the D.C. legal professional basic says Amazon has “escaped appropriate accountability” to date, in accordance with Reuters. The AG went on to say:
When an organization is caught stealing from its employees, it isn’t sufficient for the corporate to repay the quantity stolen. Stealing from employees is theft, and vital penalties are essential to strongly disincentivize this illegal conduct.
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Bloomberg notes the identical legal professional basic sued Amazon final yr for partaking in anticompetitive practices, which he claimed in the end drove up costs for customers, however a decide threw out the case for lack of proof. The AG may very well be making an attempt to revive the case with this newest authorized problem, as Bloomberg suggests.
But the allegations in opposition to Amazon and the following settlement is telling. In different phrases, Amazon may very effectively be responsible of probably the most distasteful practices within the “gig economy” whereby companies take suggestions and use them to subsidize their payroll.
The distinction, on this case, is that Amazon isn’t a small enterprise, nor a neighborhood restaurant struggling to remain afloat; Amazon is the largest on-line retailer on this planet, owned by one of many richest folks on this planet, Jeff Bezos. It stands to cause that Amazon can afford to pay its supply drivers with out having to take their suggestions.