handle with care

There’s more than just generosity fueling Amazon’s latest driver-tipping initiative

The DC Attorney General isn’t satisfied with Amazon’s 2021 settlement of a lawsuit alleging tips were withheld from drivers

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The burden of tipping right strikes Amazon again.
The burden of tipping right strikes Amazon again.
Photo: Justin Sullivan (Getty Images)

‘Tis the season to spread some cheer among drivers for Amazon.

On the back of the holiday shopping spree, Amazon said it expected to hit the milestone of 15 billion deliveries. Making these deliveries has been a huge burden on its overworked and underpaid warehouse and delivery staff who toil away in unsafe facilities. So it wants to offer them a gift: For every customer that says “Alexa, thank my driver,” Amazon will award the driver a $5 tip, it announced yesterday (Dec. 7).

The offer applies to the first million drivers that customers show gratitude to. And the five drivers among this group who receive the most thank yous will get a $10,000 bonus plus $10,000 donated to a charity of their choice.

The gesture is symbolic at best, given how little a one-time $5 tip is worth in the context of workers’ discontent with their pay scales. The “Make Amazon Pay” campaign, mounted during the Black Friday sales across 40 countries, saw more than 80 labor unions, trade groups, environmental action agencies, and other organizations protest against practices driving inequality, including the fact that real wages are going down while the corporation rakes in record revenue.

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Moreover, what seems like goodwill on the surface might feel like repentance given the backdrop of another major Amazon news that broke around the same time as the tipping initiative. The District of Columbia Attorney General Karl A. Racine is suing the e-commerce giant for robbing drivers of millions of dollars in tips.

A brief summary of why the DC AG is suing Amazon

In February 2021, Amazon settled with the Federal Trade Commission after a lawsuit alleged that it had, over two and a half years starting September 2016, withheld more than $60 million from Amazon Flex drivers who signed up to make deliveries using their personal vehicles. The state agency charged Amazon $61.7 million, all of which it used to compensate drivers from whom Amazon misappropriated funds.

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According to Racine’s complaint, that decision only addressed one part of the redressal puzzle: Restitution—repayment of the amount stolen—which “makes the victim whole.” Punishment—community service, fines, or jail time—which “deters future theft” was still pending for Amazon.

The new suit asks for a DC court to assess further financial damages, aiming to “hold Amazon to full account for its unlawful actions, and to send a clear message to employers not to divert tips for their own benefit.”

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“This lawsuit involves a practice we changed three years ago and is without merit,” an Amazon spokesperson said.

Company of interest: DoorDash

Last year, the city of Chicago sued DoorDash for deceptive business practices, including using consumer tips to “pay itself rather than its drivers.” After the backlash, DoorDash dropped the old policy. The new one gives 100% of the tips to drivers, and also presents opportunities to earn extra income via challenges and rewards programmes.

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One more thing: Is tipping a chance to give Alexa one last push?

The $5 tipping scheme could as easily have been a click on the app or website, but Amazon is specifically asking customers to speak to Alexa. Although Amazon doesn’t say as much, the request could provide a boost—albeit, a temporary and artificial one—to the struggling voice assistant. Former employees labeled the division a “colossal failure,” according to a Business Insider report. Of the 10,000 workers Amazon recently laid off, the majority were working on Alexa.

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