by Jim Kreidler, Consumer Education Specialist, FTC
Using your own vehicle to deliver packages for Amazon and earn extra money. Sounds good, right? But has Amazon been keeping the tips its drivers are making when delivering for its Amazon Flex program? According to the complaint the FTC issued today, the answer is yes.
In its app and numerous marketing materials, Amazon advertises that drivers can earn $18 to $25 per hour — plus 100% of customer tips. According to the FTC, during a two-and-a-half year period, Amazon Flex used about $61.7 million in tips to subsidize drivers’ base pay. Customers thought they were tipping drivers — not Amazon — and drivers were left shortchanged.
The FTC also says that Amazon, despite receiving hundreds of complaints from drivers who saw their pay decrease, continued diverting drivers’ tips until the FTC notified the company of its investigation.
The settlement announced today would require Amazon to pay back the full $61.7 million to drivers, provide only accurate information about tips and pay to both customers and drivers, and get drivers’ consent before changing how it handles tips in the future.
Here are some things to consider before you become a gig worker.
- Do your research. Search for information about the company online, like how it pays its workers and any other conditions of the job.
- Talk to other gig workers. Reach out to your friends or family members who are gig workers and speak with them about their experiences, how they are paid, and how the company handles tips.
- Compare earnings. Will you be paid hourly? By gig? Will you get every dollar a customer tips you? And will the company reduce your pay based on the tips you receive? Once you’re on the job, ask the company for a breakdown of your earnings so you can be sure you’re getting what they promised.
- Compare costs and coverage. If you’re considering becoming a driver using your own vehicle, estimate your gas and maintenance costs, and check your car insurance. Does your auto policy cover you while you’re driving for work?
- Report your concerns. If a company doesn’t deliver on its promises, report it to the FTC at ReportFraud.ftc.gov.