A PYMNTS Company

DC Attorney General Sues Amazon For Over Driver Tips

By  |  December 8, 2022

Amazon faces a new lawsuit from the attorney general of Washington, DC that alleges the e-commerce giant used customer tips meant for delivery drivers to reduce what it owed in driver wages.

    Get the Full Story

    Complete the form to unlock this article and enjoy unlimited free access to all PYMNTS content — no additional logins required.

    yesSubscribe to our daily newsletter, PYMNTS Today.

    By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions.

    The lawsuit by Attorney General Karl Racine further claims that Amazon covered up the practice, which allegedly began in 2016. The allegations are virtually identical to those leveled previously by the Federal Trade Commission, which announced a settlement with Amazon on the matter in 2021.

    The business practice at issue involved Amazon’s public claims that it would pay Amazon Flex delivery drivers a rate of at least $18 per hour, plus 100% of any tips that customers contributed. According to the FTC, and now Racine, Amazon in 2016 changed its payment model without notifying drivers or customers. The new model allegedly used a portion of customer tips to subsidize Amazon’s own labor costs, and tried to hide the change from drivers by reporting their tips and wages as a combined figure.

    Related: DC Attorney General Goes After Amazon’s Wholesale Biz In Antitrust Suit

    Racine’s office said Tuesday it is bringing the new complaint because the FTC settlement, although it involved Amazon agreeing to pay drivers a total of $61.7 million to make them whole, did not impose any fines on the company.

    Amazon “has thus far escaped appropriate accountability, including any civil penalties, for consumer harm,” Racine’s office said in a release. It added that the DC lawsuit seeks civil penalties “for every violation” of DC’s consumer protection law stemming from the practice and a court order barring Amazon from such violations in the future.

    In a statement responding to Racine’s suit, Amazon spokesperson Maria Boschetti said the company revised its payment model for delivery drivers in 2019. In its earlier allegations, the FTC said Amazon only changed its payment model after the company learned that federal regulators were investigating the practice.