Contractors working for the Amazon Inc. Flex program load packages into vehicles to deliver to customers in San Francisco.
David Paul Morris | Bloomberg | Getty Images
Amazon will pay $61.7 million to settle allegations by the Federal Trade Commission that it failed to pay Flex delivery drivers the full amount of tips received from customers.
The settlement, announced Tuesday, was passed in a unanimous vote by the commissioners. Representatives from Amazon didn’t immediately respond to a request for comment.
“Rather than passing along 100% of customers’ tips to drivers, as it had promised to do, Amazon used the money itself,” said Daniel Kaufman, acting director of the FTC’s Bureau of Consumer Protection, in a statement. “Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers’ permission before changing its treatment of tips in the future.”
Amazon Flex operates similarly to Uber, in that contracted delivery drivers pick up shifts on demand to deliver Amazon packages or Whole Foods orders to customers’ doorsteps. The service, launched in 2015, uses drivers to deliver packages from their own vehicles and operates in more than 50 cities across the U.S.
As part of the settlement, Amazon is required to pay more than $61.7 million to the FTC, which will be used by the agency to compensate Flex drivers. The settlement also prohibits Amazon from misrepresenting any driver’s likely income or rate of pay and how much of their tips will be paid to them, among other conditions.
This story is developing.