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Federal Register / Vol. 86, No. 26 / Wednesday, February 10, 2021 / Notices
Another study estimates worldwide transaction volume of $204 billion in 2018, which will more than double to $455 billion by 2023.2
Consumer demand for the services offered by the gig economy surely contributes to this growth. But it would not be possible without the contributions of drivers, shoppers, designers, and other gig workers, whether seeking supplemental income or relying on one gig or a patchwork of gigs to get by.
The impact of the internet-enabled gig economy on workers is a matter of robust debate in Congress, state legislatures, popular referenda, academia, and elsewhere. The two authors of this joint statement may not agree on every aspect of this debate, including whether this novel business model is, on net, beneficial for consumers and workers.
Where we do agreeand what this case reflectsis the platforms that facilitate this gig economy must treat their workers fairly and nondeceptively, just as they must consumers, and the Federal Trade Commission should work to ensure they do. That is why this case resolving our investigation into Amazon.com, Inc.s and its subsidiary Amazon Logistics, Inc.s collectively, Amazon treatment of delivery drivers is so important.
The conduct alleged in the complaint is outrageous. According to the complaint, Amazon recruited delivery drivers and, possibly, attracted customers by promising that drivers would collect all the tips awarded them by Amazon customers. At a certain entire workforce, still a substantial number. See U.S. Bureau of Labor Statistics, Electronically mediated work: new questions in the Contingent Worker Supplement, U.S. Dept of Labor Sept.
2018, https www.bls.gov/opub/mlr/2018/article/
electronically-mediated-work-new-questions-in-thecontingent-worker-supplement.htm.
2 See Mastercard & Kaiser Associates, The Global Gig Economy: Capitalizing on a $500 Billion Opportunity May 2019 at 2, https
newsroom.mastercard.com/wp-content/uploads/
2019/05/Gig-Economy-White-Paper-May-2019.pdf.
Another study estimated that spending on gig platforms was increasing 43% year-on-year in 2018.
See Uber, Working Together: Priorities to enhance the quality and security of independent work in the United States Aug. 10, 2020 at 5, https
ubernewsroomapi.10upcdn.com/wp-content/
uploads/2020/08/Working-Together-Priorities.pdf Uber Report citing Staffing Industry Analysts, The Gig Economy and Human Cloud Landscape 2019. By way of example, the number of Uber drivers in the U.S. has grown from 160,000 in 2014
to 1 million in 2020. See Jonathan V. Hall & Alan B. Krueger, An Analysis of the Labor Market for Ubers Driver-Partners in the United States at 1
Princeton U. Indus. Relations Section, Working Paper No. 587, Jan. 2015, https
dataspace.princeton.edu/bitstream/88435/
dsp010z708z67d/5/587.pdf; Uber Report.

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point, it decided to divert thirty percent of those tips from drivers to the company to subsidize the amounts it had committed to paying its drivers.
The complaint alleges Amazon then went to great lengths to ensure no one would figure out what it was doing, by changing the way it presented earnings to drivers and drafting misleading answers for service representatives to give to drivers upset at being shortchanged.
Our settlement with Amazon ensures these drivers will get back every dollar that was promised, every dollar that a customer chose to give as a tip for their service. That is a good result for an enforcement action under the FTC Act, the law we apply today. But we believe, given the importance of candor and fairness to workers in the gig economy, our current authorities could be improved. Congress can give us direct penalty authority to deter deception aimed at workers in the internet-enabled gig economy and rulemaking authority under the Administrative Procedure Act to address systemic and unfair practices that harm those workers.
Clear rules and the threat of substantial civil penalties can deter wrongdoing. The authors of this statement do not always agree on the proper scope of rulemaking and penalty authority, but we do agree here.
Authorizing the FTC to assess penalties to deter similar lawbreaking will help gig workers and make labor markets more efficient. The internet-enabled gig economy is new, innovative, and growing. We believe the modest reforms we propose here can help gig workers have a fairer shake at getting their benefit of the bargain from that growth, too.
Statement of Commissioner Rohit Chopra Today, the FTC is sanctioning Amazon.com NASDAQ: AMZN for expanding its business empire by cheating its workers. In 2015, Amazon launched Flex, a package delivery service that was widely seen as a challenge to FedEx and UPS.3 To recruit drivers, the company promised to pay them a minimum of $18 to $25 an hour, plus tips.4 But once the service was off the ground, in late 2016, Amazon changed course. The Commissions complaint charges that the company secretly began cutting its payments to drivers, and siphoning their tips to 3 See Laura Stevens, Amazon Drives Deeper Into Package Delivery, Wall Street J. June 28, 2018, https www.wsj.com/articles/amazon-drivesdeeper-into-package-delivery-1530158460.
4 Compl., In the Matter of Amazon, Inc., Fed.
Trade Commn File 1923123, 1720.

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make up the difference.5 In total, Amazon stole nearly one-third of drivers tips to pad its own bottom line.
This theft did not go unnoticed by Amazons drivers, many of whom expressed anger and confusion to the company. Rather than coming clean, Amazon took elaborate steps to mislead its drivers and conceal its theft, sending them canned responses that repeated the companys lies. The complaint charges that Amazon executives chose not to alter the practice, instead viewing drivers complaints as a PR risk, which they sought to contain through deception.6
Amazons scheme ended after it was exposed, but it likely produced significant benefits for the company.
First, by promising a higher base pay initially, Amazon was likely able to recruit drivers more quickly, particularly as the company tried to stand up Amazon Flex in time for the holiday season.7 Second, and most directly, Amazons bait-and-switch allowed the company to pocket more than $60 million in workers tips.8 And finally, by allegedly misleading its workers about their earnings, the company made it less likely drivers would seek better opportunities elsewhere, helping Amazon attract and retain workers in its quest to dominate.9
By the time this scheme was exposed in late 2019, Amazon Flex was far more established. In fact, that same year, the company quietly disclosed that it was slashing drivers minimum pay by more than 15 percent, relative to what it promised in 2015.10 This conduct raises serious questions about how Amazon amassed and wielded its market power.
Fortunately, todays action to redress the companys victims does not prevent 5 Id.

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7 Shortly after launching Flex, Amazon noted that it was trying to ramp quickly in anticipation of the holiday season, Prime Day, and other periods of high demand. See Becky Yerak, Uber for packages? Amazon looking for drivers to deliver goods, Chicago Tribune Oct. 9, 2015, https
www.chicagotribune.com/business/ct-amazon-flexchicago-1009-biz-20151009-story.html.
8 Compl., supra note 2, 8.
9 During the period of the alleged lawbreaking, gig workers were reportedly in high demand. See Christopher Mims, In a Tight Labor Market, Gig Workers Get Harder to Please, Wall Street J. May 4, 2019, https www.wsj.com/articles/in-a-tightlabor-market-gig-workers-get-harder-to-please11556942404.
10 After Amazons scheme was exposed, the company indicated that it would begin paying drivers a minimum of $15 per hour. See Chaim Gartenberg, Amazon will no longer use tips to pay delivery drivers base salaries, The Verge Aug. 22, 2019, https www.theverge.com/2019/8/22/
20828550/amazon-delivery-drivers-tips-end-basesalaries-flex. This was a significant reduction from the $18 promised in 2015, particularly when adjusted for cost of living.
6 Id.

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