The company is accused by Washington prosecutors of using tips intended for independent delivery people to secure a portion of their remuneration.
The Washington City Attorney has filed a complaint against Amazon, which he accuses of diverting tips intended for independent delivery people, according to a press release from the judge published Wednesday. The e-commerce giant is accused of using those tips to pay a portion of the amounts it owed those couriers.
Already in 2021, Amazon has agreed to pay back $62 million to delivery people to end lawsuits from the US Consumer Protection Agency (FTC) over the same facts. But Washington Attorney General Karl Racine wants the group fined and a court order permanently barring the company from resorting to the practice.
Delivery people could no longer see tip amounts
Amazon created a program called “Amazon Flex” in 2015, which encouraged customers to tip delivery people as soon as they placed their order. However, the company changed the payment system for these delivery people in 2016, which led to a large part of the tips not being paid directly to the delivery people, but to finance part of the amount owed by Amazon.
At the same time, she continued to assure customers that 100% of tips went into the pockets of delivery people. “And instead of notifying drivers of changes to their tipping system, Amazon changed the way tips were displayed in the app so delivery people could no longer see how much each customer paid,” he added in the release.
Changes to tip handling subject to permission from the delivery people
Although Amazon has reimbursed the wrongly deducted amounts, the group “so far has escaped any liability, including any fine, for damages caused to consumers”, the Washington prosecutor’s office emphasizes in justifying the complaint filed on Tuesday. This complaint “relates to a practice that we changed three years ago,” responded an Amazon spokeswoman, who believed the procedure was “unfounded.”
The 2021 settlement with the FTC also required the group to seek permission from delivery workers before making changes to its tip management, an obligation that runs until 2041.