Amazon to pay nearly $4 million for allegedly taking drivers’ tips

Amazon has agreed to pay nearly $4 million to settle charges that it took tips from customers meant for its delivery drivers. The settlement comes four years after Amazon paid $61.7 million to resolve a similar complaint from the Federal Trade Commission. The District of Columbia Attorney General's office filed a lawsuit in 2022 alleging Amazon misled residents about how digital tips were used. The lawsuit claimed Amazon's Flex business, which allows people to deliver packages with their own cars, changed its payment model in 2016 to lower costs without disclosing the change. Amazon allegedly used customer tips to make up the difference between its new base pay and the promised $18-$25 per hour for drivers. The company denied the allegations and did not admit to wrongdoing as part of the settlement. Amazon will pay $2.45 million in penalties and $1.5 million in legal fees as part of the settlement. The company must also disclose on its website and app how tips impact driver earnings. The settlement resolves a practice that Amazon changed more than five years ago, according to a company spokesperson. Amazon's Flex program has evolved over time, and the company claims it has already addressed the issue.