10: Amazon’s Flex Driver Pyramid Scheme

make your realms. It can be a fairly low paying job, but if you get decent tips from the customers you deliver to, you'll be able to make do. Probably you're not going to get rich doing this, but every little helps. Secretly though, imagine this in the background. The company you work for, Amazon, which is owned by the world's richest man, is literally stealing money from your tips that weren't enough

to make you furious. I don't know what is Believe it or not, though this is not a hypothetical situation. This is exactly what happened at Amazon. For two and a half years. Amazon was effectively stealing money from the tips of Amazon Flex drivers when they got caught. Amazon was fined sixty one point seven million dollars by America's Federal Trade Commission or the FTC in one somehow, though, get this, they got richer of the back of that.

Now you're probably thinking, how the fuck. Well, let's get into it. So the fine I just mentioned is actually roughly the amount Amazon stole from its Flex drivers. According to journalists Will a remus of one zero. That's sixty one point seven million dollars roughly taken from drivers. What's more, in the hours after the FTC fine announcements came out, Amazon's stock prices rose by one to two percent. Yeah,

that's right, they rose. This added around twenty billion dollars to the company's market value, As Will Arima says in his one zero article, Corporate crime Pays. So anyway, how did this scam work? Well, basically, Amazon Flex drivers work for a guaranteed minimum hourly rate. Anything they make on top via tips was supposed to be there's extra money. Amazon told them that they would be able to one

of the tips. Likewise, with the customers, they were told if they tipped their driver, all of it would go to the driver. What happened, though, is that Amazon was effectively building a pyramid scheme, using the money from tips to pay the minimum hourly rate of the drivers at times, and then secretly deducting the tips before they got them. This is completely criminal. If you or me did something like this, we'd probably go to prison. But Amazon seems

to be above the law. Journalist Joanna Brien first broke this story for The l A. Times. She wrote, quote Amazon at times deeps into the tips earned by contracted delivery drivers to cover their promised to pay. A Times review of emails and receipts reveals Amazon guarantees third party drivers for its Flex program a minimum of eighteen dollars to twenty five dollars per hour, but the entirety of

that payment doesn't always come from the company. If Amazon's contribution doesn't reach the guaranteed wage, the e commerce giant makes up the difference with the tips from customers. According to documentation shared by five drivers. In emails to drivers, Amazon acknowledges it can use any supplemental earnings to meet the promised minimum should the company's own contribution for short.

Amazon insists that the drivers received the entirety of their tips, but they declined to answer questions about whether it uses those tips to help the drivers a base pay end quote. An Amazon spokesperson named Amanda I wrote the following in a statement, quote, our pay commitment to delivery drivers has not changed since we launched the Amazon Flex program. Delivery partners still earn eighteen dollars per hour, including one of tips, and on average, drivers earn over twenty dollars per hour

end quote. Well, as we know, it seems like the FTC disagrees with that. Now. Amazon conveniently doesn't actually provide drivers with a breakdown of their tips and pay beyond showing them their full payout. So the way some cunning Amazon Flex drivers called Amazon out was by checking the tips paid to them when delivering packages to their own houses. One driver, for example, tipped himself fifteen dollars and ninety cents when delivering a package of paper towels to his

own home. When he checked his account two days later, he saw that he was credited as receiving no tips for the whole two hours shift that day, the one where he tipped himself. When he put in a formal complaint to Amazon about this, they adjusted his pay without any explanation. Seemingly adding extra tips on top two. Now, believe it or not, some of this is actually legal in some places in America, reported by the l a Times article quote, the practice is legal in some states.

The California Labor Codes Provision three five one, which targets the practice, does not apply to contractors because they are seen as independent business owners. In Seattle, a group of drivers has contested the classification in appending class action lawsuit, claiming they are actually treated as employees. Amazon would not say whether it dips into drivers tips in California. End quote. Now, eventually Amazon was found out and this huge fire was

given to them. As we know, Amazon said they didn't really accept what was levied at them, but they paid the fire anyway. Here's what the FTC had to say about it in a press release from one quote. According to the FTC, these administrative complaints against Amazon and its subsidiary, Amazon Logistics. The company regularly advertised that drivers participating in the Flex program would be paid eighteen to twenty five dollars per hour for their work making deliveries to customers.

The ads, along with the numerous other documents provided to Flex drivers, also prominently featured statements such as you will receive one percent of the tips you earn while delivering with Amazon Flex. Rather than passing along one percent of customers tips to drivers as it had promised to do, Amazon used the money itself. Our action today returns to drivers the tens of millions of dollars in tips that Amazon misappropriated, and requires Amazon to get drivers permission before

changing its treatment of tips in the future. Pend quote. To get an idea of what it's like working as an Amazon Flex driver, I spoke to someone that is currently still working for them. We'll call him Bob. Bob believes that he had tips stolen from him in the past, and he has several other grievances with Amazon's Flex driver program. Let's see what he had to say. They have not exactly been fair. They've not been treating you guys right.

The biggest issue is Amazon will dispatch stuff late or they'll they'll be whether delays or a myriad of issues. And when it comes right down to it, every time something is late, they automatically blame the drivers for it and then punish the drivers for it. There's no middleman.

You can try and appeal it, but the only time I've ever been successfully appealed anything is to go to their escalations department because all of their support is offshore now and people don't understand or they just don't care. I mean, I'll get emails like, oh, well, we're not going to investigate this issue. It's like, I understand that I'm a contracted person and I'm not an Amazon employee,

but where is the fairness in this? So, for example, yesterday they took a whole Food's order and I had taken three previous orders and gone back to the location, and they gave me an order that was literally sitting on the shelf when I said of the first time. And now it's late, and now I'm being blamed for the late delivery, even though they could have dispatched it to me when I was there the first time. But

they're holding me accountable for the late delivery. And and the same holds true for if packages go missing, it's the driver's fault. If the package is damaged, it's the driver's fault. I left packages at the location because they were damaged, and I'm still being held accountable for him. It's like I never even left your store, right, So they are essentially not paying you correctly for things that you haven't done correct and then they will you know,

they call it deactivating you. They will deactivate you for late deliveries or for stuff that you can't get the livered because people don't answer their phones, or there's no safe place to leave it and you have to take it back to the location. But that's your fault because the customer was on cooperative. They call it deactivating. What does that mean? They don't gonna work with you again? Okay, So you get all of your stuff through an application.

It's called Amazon Flex, and if they decide that they don't want you to work for them anymore, they de activate your account and you can't get worked. They'll send you an email that says you've been deactivated for such such a reason, and happy trails. So, as Bob just explained that if anything happens to the postle, even if it's not the driver's fault, they will get penalized for it and maybe even deactivated. What an Orwellian term. Anyway, let's hear what Bob had to say about the tip

stealing scandal at Amazon Flex. Drivers. Amazon, we're taking tips from drivers and using those tips to make the other drivers wages a little better. So they weren't actually us the tips that we were getting. They were they were dispersing the tips elsewhere. I mean, I had only worked for Amazon for six months at that point, and I got a seven page or check from the FTC because that's how much they had taken out of my tips. I know drivers that got seventeen thousand dollar checks because

Amazon was stealing that much of their income. Imagine that your own employer is stealing tens of thousands of dollars from you when they're already one of the richest companies on Earth. That's Amazon for you. The FTC dispersed sixty eight million dollars of funds drivers. I still think they're honestly doing it. And the reason I say that is my my tips always come out as a round number. It's never like, you know, five dollars and seventeen cents.

It's always five dollars or seven dollars. And you notice this because sometimes you only get one delivery on your block and you'll get a five dollar tip, but it's always round numbers or on a fifth descent. But it's never, you know, se cents or something like that. It's it's just a little kind of hanky, you know what I mean. Bob thinks Amazon is still possibly stealing from his tips. We don't know, we can't verify that, but that's Bob's hunch.

There are other things that are bothering him as well. I've listened to this so like Amazon will. Most recently they have opened up what they call same day deliveries, so people will get their order within twenty four hours and it will come out of a central warehouse. And um, quite often they'll give you a four and a half hour block and they'll expect you to deliver upwards of fifty packages in their foin half hours, and quite often. I mean I've been doing delivery and dispatches stuff for

twenty five years. I know this kind of work. So they are overloading us first of all, and then when you run over, you have to literally email and email and email and email to get over each payments from them, and half the time like they're like, well, we paid you for the block you've worked, and and you know you're not talking a lot of money, You're talking fifty bucks. But when it happens we after weekly, it adds up.

So you're you're constantly fighting to get those little bits of money, and Amazon it's like, well, we paid you for the money or at the time it worked. And then if you have to take stuff back to the warehouse, like an undeliverable package or something that's damage or something, they're not going to pay you for that time either. So basically, what Bob is saying here is that there are parts of the Amazon Flex delivery driver role that

you just have to fulfill. For example, if you have to take a parcel back to the warehouse, stuff like that, but they're not paying them for this time. Every single second that they're working on that job is time working under the Amazon Flex program. They should be paid for that every second. In my opinion, they're expecting you to drive across the city to deliver back to their warehouse and they are not going to pay. How does that make you feel? You know, you're working this, you're trying

to make a living. How do you feel about all this kind of shitty? To be honest, I mean, you know, I do this work because I've had some physical injuries and I'm able to do this. There's other stuff that I can't do. I mean, I don't have a real cupe education or anything like that. So you know, and I live in an area that the prices have skyrocketed, so you know, this is the best that I can do. And you know, in some days it's just like it really feels like your noses to the grindstone, you know

what I mean. I don't have any version of working. Some people might say, well, why why don't you just work somewhere else, you know, or you can be a contract you know, what would you say to that? They shut down Colorado almost completely during the pandemic, And this is one of the few ways that I can make money. And I mean there's other services out there that you

can work through. You can do grump up or uber or left, but you know a lot of that depends on your vehicle size or the age of your vehicle and stuff like that, so there's constraints on that. Amazon doesn't really care what you're driving, as long as you can cram as much crap in your car as you can and deliver it. You know, they also of precedents to new drivers, so they'll you know, I've been doing

this for three years. Um, I've got friends that have been doing it since the program started, and they'll hire, you know, fifty new drivers and give them all the work and let the drivers that have been doing it consistently for years sit there and start for a week. The kind of cherry on top of the cake is the support system that they have. We we don't have any way to actually talk to the people dispatching the runs.

We have UM Driver's Support, which, you know, you you contact them through the app and you get a phone call back. And these people are untrained. They have no clue what we're actually trying to do. UM they don't even know that, you know. They're like, well, you can just deliver it later. It's like, well, I'm not being paid to deliver the package later. They're like, what do you mean. It's like, well, I'm thirty miles from home. I Am not going to go home and try and

deliver someone's package in two hours. I'm not being paid for that, you know. And on top of that is the time the gas and everything else. No, I mean, either the people get their package or it goes back to the world. It's a binary solution set on that because they're not going to give us any additional money to hang out to make sure that their packages are delivered um and then they're like, well, if you have

a problem with that, email ourproath support. So hopefully after listening to Bob there, you realize that next time you want to get really angry with your Amazon delivery driver or whoever else's probably not their fault. As we've just heard, Amazon and not supplying them with the proper infrastructure they need, they're not paying them properly, and as we heard at the top of the episode, they were literally stealing money from them. The delivery driver is not the enemy, I

promise you. Next week is the final episode of Megacorp, will be taking a look back over everything we've learned in this series. Megacorp is made by my production company H eleven for Cool Zone Media, Written, researched and produced by myself, Jake Hanrahan. It was also produced by Sophie Lichtman. Music is by Some Black, graphics by Adam Doyle and sound engineering by Splicing Block. If you want to get in touch, follow me on social media at Jake Underscore Hanrahan. That's h A N A A h A N