Amazon to Pay $61.7M to Settle FTC Complaint that it Kept Tips for Flex Drivers

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In the complaint, the Commission noted that Amazon Logistics’ advertisement claimed that drivers under its Amazon Flex program will be paid $18 to $25 per hour for delivering orders to customers. Its advertisements also stated that drivers “will receive100% of the tips” they earn while delivering with Amazon Flex.

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Amazon classifies drivers under the Amazon Flex program as independent contractors. They can make deliveries using their personal vehicles. Under the program, drivers deliver goods and groceries ordered through the Prime Now and AmazonFresh programs, which allows customers to give them tips. The e-commerce giant assured customers that 100% of the tips they paid will be given to drivers.

The FTC alleged that Amazon lowered its hourly rate for Flex drivers in late 2016. The e-commerce giant allegedly did not notify drivers that they will no longer receive the promised $18 to $25 per hour rate.

Additionally, the Commission alleged that Amazon used customer tips to make up the difference between the promised rate and the new lower hourly rate. In other words, the e-commerce giant allegedly ripped off Flex drivers more than $61.7 million in tips.