Amazon Flex Tips Lawsuit: The $61.7 Million FTC Settlement

What Amazon Did

Amazon Flex is the program where independent drivers use their own cars to deliver Amazon packages and groceries, and Amazon publicly promised them they would keep 100% of the tips customers left. According to the Federal Trade Commission, that promise was broken. Starting in late 2016, Amazon quietly lowered the hourly rate it paid Flex drivers and then used customers’ tips to make up the difference to the advertised pay — effectively pocketing tip money that was meant for drivers, without telling either the drivers or the customers. Amazon only changed the practice in 2019, after it became aware of the FTC’s investigation.

The deception cut two ways: drivers lost tips they earned, and customers who tipped generously were unknowingly subsidizing Amazon’s labor costs rather than rewarding their driver.

The Settlement

Amazon agreed to pay $61.7 million to settle the FTC’s charges — an amount equal to the tips the FTC said were withheld — and the money was used to refund affected Flex drivers. The FTC distributed the funds directly, sending payments to well over a hundred thousand drivers; those who had more than a few dollars withheld received the full withheld amount, and the average payment was several hundred dollars. Amazon was also barred from changing how a driver’s tips are used as pay without the driver’s clear, informed consent.

This is one of the cleaner outcomes in consumer/worker litigation: the remedy directly returned the misdirected tips to the people who earned them.

What Gig Workers Should Know

For gig and tipped workers, the case underscores a basic right: tips belong to the worker, and a platform generally cannot use them to cover its own pay promises. Keep an eye on how an app breaks down base pay versus tips, watch for changes to pay structures, and report suspected tip skimming to labor regulators or the FTC. Transparency in how tips are displayed and paid is exactly what this settlement forced.