FTC says Amazon will pay $61.7M to settle charges that it withheld some customer tips from Flex drivers over 2.5 years; FTC will use the sum to pay the drivers
The case also sits alongside DoorDash's settlement over tip-allocation claims, where the company agreed that earned tips would not reduce base pay. Together, the coverage makes tip treatment a defined enforcement issue in app-based delivery.
First-order effects
Amazon will pay $61.7 million to resolve the FTC's allegations, and the FTC will distribute the funds to Flex drivers.
Flex drivers covered by the settlement are positioned to receive repayment for customer tips the FTC says Amazon withheld over the stated period.
Second-order effects
Delivery platforms using tips in pay calculations face a clearer enforcement benchmark after Amazon's payment and DoorDash's commitment not to offset base pay with tips.
Amazon's earlier move to stop the practice is now backed by a financial settlement, raising the cost of compensation designs that blur the line between promised pay and customer gratuities.
Third-order effects
The linked cases point toward a gig-delivery pay model in which customer tips are treated as driver earnings rather than a mechanism for funding platform-promised base compensation.
FTC-administered restitution gives labor-related consumer-protection enforcement a more direct role in policing how platforms disclose and allocate driver pay.
The trend: Gig-delivery platforms are facing greater pressure to separate customer tips from guaranteed driver pay and make compensation practices enforceable.
Here's our story on it: Nearly two years after the @latimes first revealed Amazon was dipping into driver tips to cover their minimum pay, Amazon is being fined $61.7 million by the @FTC https://www.latimes.com/...
#BREAKING: Amazon to pay $61.7M to settle FTC charges it withheld some customer tips from Amazon Flex drivers. Settlement returns full amount that Amazon allegedly withheld from drivers and will be used by the FTC to compensate drivers: https://www.ftc.gov/... 1/4 https://twitter…
This is a drop in the bucket for Amazon. Amazon has crushed small businesses and stolen intellectual property from startups. We must do more to curb their anticompetitive behavior. https://twitter.com/...
“a driver who was assigned to deliver an order to his own home tipped himself $12. The guaranteed minimum base pay for the order was $27. The driver received $30 in compensation for the order, which the company said included 100% of the tip — showing Amazon contributed only $18.”…
Baffles me that you can steal $62M dollars and there's no criminal charges. Art thieves should set themselves up a Delaware C-Corp*, clearly. * Legal question: what's the ideal corporate structure for a gang of thieves? https://twitter.com/...
In 2015, @Amazon promised to pay drivers $18—$25/hour + tips. In 2016, @FTC charges Amazon secretly began cutting pay & siphoning tips to make up the difference, taking “almost 1/3 of drivers' tips to pad its own bottom line.” Amazon will repay $61.7M: https://www.washingtonpost.…
The settlement comes nearly two years after the Los Angeles Times first exposed that Amazon was dipping into customer tips to cover the base pay guaranteed to Flex drivers, who deliver Amazon Fresh, Prime Now and other orders. https://www.latimes.com/...
In 2019, @JMBooyah broke the story that Amazon was using their flex drivers' tips to cover wages (https://www.latimes.com/...). Today, the FTC announced Amazon is to pay a $61.7 million settlement, representing the $ it allegedly withheld from drivers. https://www.ftc.gov/...
Today the @FTC announced an important enforcement action against Amazon for secretly withholding millions of dollars in promised tips from its gig drivers. I'm grateful for staff's hard work to uncover and investigate this mistreatment of Amazon's workers https://www.ftc.gov/....
BREAKING: AMAZON STOLE TIPS FROM ITS DRIVERS “Rather than passing along 100 percent of customers' tips to drivers, as it had promised to do, Amazon used the money itself” https://www.ftc.gov/...
“Rather than passing along 100 percent of customers' tips to drivers, as it had promised to do, Amazon used the money itself” Amazon will pay the FTC $61.7 million over charges that it withheld customer tips from Amazon Flex drivers https://www.ftc.gov/...