Amazon Settles $4M Lawsuit Over Misuse of Driver Tips

The e-commerce giant was accused of diverting customer tips to subsidize driver wages in its Flex program from 2016 to 2019.

Amazon agreed to pay $3.95 million to the District of Columbia, including $2.45 million in penalties and $1.5 million in legal fees, to settle allegations of misusing driver tips.
The lawsuit claimed Amazon used tips from its Flex delivery drivers to offset its wage costs without informing customers or drivers, violating consumer protection laws.
The alleged practice began in 2016 and continued until 2019, when an FTC investigation prompted Amazon to change its tipping policy.
A previous 2020 settlement with the FTC required Amazon to reimburse $61.7 million in tips to affected drivers for similar violations.
As part of the settlement, Amazon must now clearly disclose how tips impact driver earnings on its website and app to ensure transparency moving forward.