Amazon vows to stop using tips to pay drivers minimum wage

While food delivery startup, DoorDash, is trying to rebuild its reputation after the company came under fire earlier this week for not changing its pay policy where customers’ tips are used to pay their riders, unbeknownst to many, including their drivers, a similar scheme is practiced by Amazon who admitted that they are sometimes dipping their delivery drivers’ tips to pay for the guaranteed wages of their delivery employees.

However, after seeing the massive backlash received by DoorDash for the same policy, the bad practice will be change, a letter from Amazon said to its drivers.

Amazon now promises their Flex drivers, who deliver for the company’s Prime Now, Fresh, and Whole Foods services, that they will see a full breakdown of their earnings every shift, including the money they earned from tips.

Along with this promise comes the assurance that the e-commerce giant will no longer use their workers’ tips in order to supplement the amount that needed to cover up their minimum wage and Amazon said that the minimum wage that their delivery drivers will receive would ultimately come from the company’s own pocket.

In February, journalists have revealed that Amazon is using their employees’ tips in order to pay for parts of their workers’ minimum guaranteed salary in order to save the company some money. Earlier this year, the company pays their delivery drivers a range of $18 to $25 an hour, but only contributed an average of $19 an hour for the minimum wage; the rest comes from tips.

“Amazon will always contribute at least $15 per scheduled hour to driver pay, and often more, based on location and demand, ” Amazon spokesperson Rena Lunak said. “As always, for deliveries with tipping opportunities, drivers will receive 100 % of the tips.”

In the email the company sent to their employees, Amazon promises o shell out at least $15 to $19 per scheduled hour as its contribution to the wage the delivery drivers earn, effectively increasing the contribution from the company.

“While earnings vary by region and block, with the change to Amazon’s minimum contribution, we expect nationwide average earnings for these blocks to increase to more than $27 per hour, ” the email to drivers read.

While many of the drivers have expressed their joy on the reform that Amazon promises to implement, many have echoed their confusion on whether the new policy was actually a raise. Without a clear breakdown of the payments they receive, many drivers are left in the dark when it comes to how much did Amazon actually contributed to their minimum wage and how much of it comes from tips.

Meanwhile, in a similar fashion, food delivery service, DoorDash, received massive backlash for not paying their drivers tips that customers give them. The issue blew out after an employee published an article detailing how the company was “stealing” tips from them.

Many people rallied behind the drivers of DoorDash, prompting the company’s co-founder and CEO, Tony Xu, to promise their riders that they will change their tipping policy so their riders can earn more.

“Going forward, we’re changing our model – the new model will ensure that Dashers’ earnings will increase by the exact amount a customer tips on every order. We’ll have specific details in the coming days,” he wrote in his Twitter account.

Nonetheless, a month after Xu made his promise to his riders, reports revealed that the company is yet to change its payment policy and still continues “stealing” their tips. Because of the untimely response of the company on the clamor, many riders have taken the matters in their own hands and started asking customers to pay their tips in cash. Some are even handing out pamphlets explaining the issue and why they prefer to be paid in cash instead.

Yesterday, DoorDash CEO once again made a promise that his previous promises were scheduled to be implemented next month. He defended the delay saying that his team has been studying a new payment scheme this month in order to “strike” a balance.

As part of the reforms, the company said that their riders will now receive 100% of their tips and will be able to view a breakdown of their earnings per delivery.

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