After the Federal Trade Commission approved a final administrative consent order against Amazon, the company will have to pay more than $ 61.7 million to settle charges for failing to pay Amazon Flex drivers the full amount of tips they received from drivers. Amazon customers for a period of two and a half years.
Only Amazon changed the way it paid drivers when it learned that the FTC was investigating the company.
Broadly speaking, Amazon Flex is an Amazon messaging service.
Among other conditions, to drive for Amazon Flex, the person must meet the following eligibility requirements:
- Be at least 21 years old.
- Have a valid driver’s license and insurance.
- Have a qualified vehicle.
In general, the company serves consumers through its physical and online stores and focuses on selection, price and convenience.
The company designs its stores to enable it to sell hundreds of millions of unique products by itself and by third parties in dozens of product categories.
Customers access your offerings through websites, mobile apps, Alexa, devices, streaming, and by physically visiting company stores.
Amazon also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, and other devices, and develops and produces multimedia content.
The company seeks to offer its customers low prices, fast and free delivery, easy-to-use functionality, and timely customer service.
In addition, it offers Amazon Prime, a membership program that includes unlimited free shipping on more than 100 million items, access to unlimited streaming of tens of thousands of movies and TV episodes, including original content from Amazon, and other benefits.
According to the FTC’s administrative complaint, announced in February 2021, the company regularly advertised that drivers participating in the Flex program would be paid between $ 18 and $ 25 per hour for the work they performed on customer deliveries.
The announcements, along with many other documents provided to Flex drivers, also included prominent statements such as: “You will receive 100% of the tips you earn while delivering with Amazon Flex.”
The FTC complaint alleges that Amazon also assured its customers that 100% of the tips they paid would go to the driver.
According to the complaint, the company stopped the contested conduct only after learning of the FTC investigation in 2019.
The final order requires Amazon to pay $ 61,710,583, which represents the total amount the company allegedly withheld from drivers and will be used by the FTC to compensate drivers.
Additionally, Amazon will be prohibited from misrepresenting any driver’s likely earnings or rate of pay, how much of their tips they will be paid, as well as whether the amount paid by a customer is a tip.
Amazon will also be prohibited from making changes to the way a driver’s tips are used as compensation without first obtaining the driver’s express informed consent.