D.C. Attorney General Karl A. Racine announced Wednesday a lawsuit against Amazon.com Inc. and Amazon Logistics, Inc. for stealing tips from delivery drivers through means of a deceptive and illegal operation that tricked consumers into believing they were increasing drivers’ compensation when the company was actually diverting tips to lower labor costs and increase profits.
In 2015, Amazon started its Amazon Flex service offering quick deliveries of Amazon products through company drivers. In the District, Amazon serves tens of thousands of consumers and fills thousands of orders weekly.
Amazon urged consumers to tip their delivery drivers, offering a default preselected tip amount. District consumers were assured that 100% of the tip would go to the drivers.
In 2016, the company changed its driver payment model so that a large portion of these tips didn’t go toward the drivers’ compensation but were instead used to pay a portion of what Amazon promised to pay the driver. This was done despite Amazon telling consumers that the drivers would receive the whole tip.
Amazon used the excess tip money for operating costs. The OAG is suing the company under the District’s Consumer Protection Procedures Act.
“Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages,” Racine said. “What’s more, consumers need to know where their tips are going. This suit is about providing workers the tips they are owed and telling consumers the truth. 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.”
The OAG seeks civil penalties for the violation of the CPPA and the costs incurred for bringing the case and a court order mandating that Amazon doesn’t engage in those types of practices again.