The number represents the total amount of tip allegedly withheld over the two-and-a-half years that the controversial Flex primary payment system was in effect.
Amazon has also approved new restrictions on how wage information is communicated to drivers.
(Rohit Chopra), commissioner of the Federal Trade Commission, said in statementIn total, Amazon stole nearly a third of drivers’ tips, accusing Amazon of expanding its business empire by deceiving its workers.
Amazon rejected the notion that its pay structure had stolen tips, or that it was unclear, and one company representative said: While we do not agree that the way we reported wages to drivers was unclear, we added more clarity in 2019.
The Variable Baseline Payment System was established in late 2016, and has been audited after a February 2019 report.
Amazon initially defended the practice, saying that drivers still receive 100 percent of the tips sent by customers, even in cases where that tip replaces the base salary that Amazon could have provided.
According to the FTC’s complaint, Amazon used this ambiguity to hire drivers with promises of high base wages and potential for high perks.
Workers were told: They keep 100 percent of their tip, and separately guarantee a base wage of between $ 18 and $ 25 an hour.
Drivers are not informed that tips are sometimes used to pay the base fare, resulting in a portion of the payment being transferred to Amazon instead of the driver.
In its official statement, the authority said: Amazon received hundreds of complaints from drivers after the change was made, as drivers became suspicious when their overall profits declined.
She added: Drivers who complained received emails falsely claiming that the company continues to pay 100 percent of tips to drivers.
Amazon became aware of the FTC’s investigation in May 2019, when the commission issued a civil investigation request for records related to the Flex program, and Amazon discontinued the practice in August 2019.
Amazon reported $ 11.6 billion in revenue over the course of 2019, and the Flex program was only a small portion of the company’s operations.
Notably, the settlement only includes money withheld from drivers, as the FTC does not have the legal power to impose punitive fines on companies that break the law.