How Amazon Swindled Its Own Drivers, Got Caught, and Ended Up Richer
The company’s $62 million FTC settlement shows ‘corporate crime pays’
One of the world’s richest companies was accused of systematically shortchanging some of its lowest-paid, most precarious workers. It got sued by the U.S. government. It eventually agreed to pay back the money it had pocketed. And it came out billions richer in the end.
That’s the ugly bottom line of Tuesday’s news that Amazon has agreed to pay $62 million to the Federal Trade Commission (FTC) to settle charges that it essentially pocketed customer tips intended for contracted Amazon Flex drivers — conduct that FTC commissioners called “outrageous.” The money represents the amount it diverted from those drivers, and the FTC said it will distribute it to those affected. In the hours after the announcement, Amazon’s stock actually rose by 1%-2%, adding roughly $20 billion to the company’s market value. (Its stock rose further in after-hours trading when Jeff Bezos announced he’s stepping down as CEO, a move that appeared unrelated to the settlement.)
The drivers, working for a guaranteed minimum hourly rate and using their own vehicles, were told they would keep 100% of customer tips. Customers using the Prime Now and Amazon Fresh apps were also told that 100% of…
