D.C. Attorney General Sues Amazon Over ‘Deceptive’ Tipping Scheme

Amazon is under fire for allegedly stealing tips from delivery drivers.

Karl A. Racine, Attorney General for Washington, D.C., this week filed a lawsuit(Opens in a new window) against the tech giant for what he called “a deceptive, illegal scheme” that diverted gratuities to reduce labor costs and increase profits. “This suit is about providing workers the tips they are owed and telling consumers the truth,” Racine says(Opens in a new window).

In 2015, Amazon invited people to make on-demand deliveries via Flex, which was pitched at the time as “Uber for deliveries.” Those 21 or older with a valid driver’s license could earn $18 to $25 per hour for picking up and dropping off local packages using their own vehicle and smartphone.

At launch, the company encouraged consumers to tip their driver, promising that 100% of the gratuity would go directly to the worker. But by 2016, according to Racine, Amazon began funneling a “large portion” of those tips into its coffers to help compensate drivers.

The company reportedly “continued to assure consumers” that the full amount would land in drivers’ pockets, “despite the fact that the company was secretly using these tips to subsidize its own labor costs and increase profits,” the AG’s office says. Racine also claims Amazon covered up the practice by lying to customers and blocking drivers from seeing tip amounts.

“Workers in the District of Columbia and throughout our country are too often taken advantage of and not paid their hard-earned wages,” Racine says. “Amazon, one of the world’s wealthiest companies, certainly does not need to take tips that belong to workers. Amazon can and should do better.”

While Amazon did previously reimburse Flex drivers as part of a settlement with the Federal Trade Commission(Opens in a new window) (FTC), it has so far avoided civil penalties—like the ones Racine is seeking for allegedly violating the District’s Consumer Protection Procedures Act (CPPA).

The news comes as Amazon this week launched(Opens in a new window) a “thank my driver” initiative for its official Amazon delivery staff. If you say, “Alexa, thank my driver,” the voice assistant will send a $5 tip to the person who delivered your most recent package. Activate it on an Alexa device, or call up the voice assistant from within Amazon’s Alexa or Amazon Shopping apps.

Amazon is only offering this for the first million tip requests. It says the five drivers who receive the most customer thank yous during the promotional period will get $10,000 and another $10,000 to donate to their charity of choice.