On Tuesday, the Federal Trade Commission (FTC) announced that it will be fining Amazon $61.7 million for using drivers’ tips to pay their salary for over two and a half years.
“Today, the FTC is sanctioning Amazon.com for expanding its business empire by cheating its workers,” said FTC Commissioner Rohit Chopra in a statement. “The Commission’s complaint charges that the company secretly began cutting its payments to drivers, and siphoning their tips to make up the difference. In total, Amazon stole nearly one-third of drivers’ tips to pad its own bottom line.” The FTC has ordered that the $61.7 million go back to the workers who were shorted pay.
The drivers were employed through Amazon’s Flex service, a package delivery service that was meant to compete with FedEx and UPS in 2015. The workers, who are contractors and not employees, were sold a job with competitive pay: Amazon promised to pay them $18 to $25 an hour, plus 100 percent of the tips that they received. But instead, Amazon used the tips to pay the drivers their base pay, shorting them of tips in order to save themselves millions.
Chopra called the scheme a “bait-and-switch” in which Amazon recruited enough workers to drive for the holiday season, pocketed the tips and then kept the drivers from seeking other employment by misleading them about the pay.
The company evidently stopped the practice after reporters uncovered the scheme. In 2019, the L.A. Times printed one driver’s account of the tip shorting. “In one case, a driver who was assigned to deliver an order to his own home tipped himself $12,” wrote Johana Bhuiyan of the L.A. Times. 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 percent of the tip — showing that Amazon contributed only $18.”
Drivers had at one point begun to catch on to what the company was doing. But, when they contacted Amazon about it, the FTC says, they received a canned response in which the company continued to perpetuate the misleading statement that it was providing them with “100 percent of customer tips” — not explaining that Amazon wasn’t providing 100 percent of what they had promised they’d pay.
Chopra said that he hopes that this will mark a turning point for the FTC. “The Commission has historically taken a lax approach to worker abuse, entering no-consequences settlements even in naked wage-fixing matters that are criminal in nature. Despite broad pronouncements about a commitment to policing markets for anticompetitive conduct that harms workers, the FTC has done little. I hope that today’s action turns the page on this era of inaction.” President Joe Biden has nominated Chopra to be the director of the Consumer Financial Protection Bureau.
With this, Amazon joins a cabal of tech companies that have allegedly treated their gig workers this way. Instacart and Doordash also have apparently been found to be shorting their drivers using a similar method. But not only was Amazon reportedly shorting its drivers’ pay, it was also spying on its Flex workers’ social media accounts, Motherboard reported last year. According to Motherboard, Amazon used an online platform to monitor if any drivers were talking about protests or strikes against the company.
Among Tuesday’s news about Amazon CEO Jeff Bezos stepping down later this year to become an executive chair was also a report that the company is intensifying a “severe” effort to bust a union effort in their warehouse in Alabama, the Guardian reported. “When it comes to this union busting, it’s severe. We’ve never seen anything like it on this level,” an organizer with the union told the outlet.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $93,000 in one-time donations and to add 1295 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
Maya, Negin, Saima, and Ziggy