WEBVTT - 10: Amazon’s Flex Driver Pyramid Scheme

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<v Speaker 1>I want to thank every Amazon employee and every Amazon

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<v Speaker 1>customer because you guys paid progress. You guys paid problems.

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<v Speaker 1>This is megaical an investigative podcast exposing some of the

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<v Speaker 1>world's most unethical corporations. This series is about Amazon. I'm

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<v Speaker 1>Jake Hanrahan, journalists and documentary filmmaker. Mega Corp is produced

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<v Speaker 1>by H eleven for cool Zone Media. Picture this. You're

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<v Speaker 1>a freelance Amazon delivery driver what's known as an Amazon

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<v Speaker 1>Flex driver. You deliver packages, You do your best, you

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<v Speaker 1>make your realms. It can be a fairly low paying job,

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<v Speaker 1>but if you get decent tips from the customers you

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<v Speaker 1>deliver to, you'll be able to make do. Probably you're

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<v Speaker 1>not going to get rich doing this, but every little helps.

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<v Speaker 1>Secretly though, imagine this in the background. The company you

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<v Speaker 1>work for, Amazon, which is owned by the world's richest man,

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<v Speaker 1>is literally stealing money from your tips that weren't enough

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<v Speaker 1>to make you furious. I don't know what is Believe

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<v Speaker 1>it or not, though this is not a hypothetical situation.

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<v Speaker 1>This is exactly what happened at Amazon. For two and

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<v Speaker 1>a half years. Amazon was effectively stealing money from the

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<v Speaker 1>tips of Amazon Flex drivers when they got caught. Amazon

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<v Speaker 1>was fined sixty one point seven million dollars by America's

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<v Speaker 1>Federal Trade Commission or the FTC in one somehow, though,

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<v Speaker 1>get this, they got richer of the back of that.

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<v Speaker 1>Now you're probably thinking, how the fuck. Well, let's get

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<v Speaker 1>into it. So the fine I just mentioned is actually

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<v Speaker 1>roughly the amount Amazon stole from its Flex drivers. According

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<v Speaker 1>to journalists Will a remus of one zero. That's sixty

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<v Speaker 1>one point seven million dollars roughly taken from drivers. What's more,

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<v Speaker 1>in the hours after the FTC fine announcements came out,

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<v Speaker 1>Amazon's stock prices rose by one to two percent. Yeah,

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<v Speaker 1>that's right, they rose. This added around twenty billion dollars

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<v Speaker 1>to the company's market value, As Will Arima says in

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<v Speaker 1>his one zero article, Corporate crime Pays. So anyway, how

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<v Speaker 1>did this scam work? Well, basically, Amazon Flex drivers work

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<v Speaker 1>for a guaranteed minimum hourly rate. Anything they make on

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<v Speaker 1>top via tips was supposed to be there's extra money.

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<v Speaker 1>Amazon told them that they would be able to one

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<v Speaker 1>of the tips. Likewise, with the customers, they were told

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<v Speaker 1>if they tipped their driver, all of it would go

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<v Speaker 1>to the driver. What happened, though, is that Amazon was

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<v Speaker 1>effectively building a pyramid scheme, using the money from tips

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<v Speaker 1>to pay the minimum hourly rate of the drivers at times,

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<v Speaker 1>and then secretly deducting the tips before they got them.

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<v Speaker 1>This is completely criminal. If you or me did something

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<v Speaker 1>like this, we'd probably go to prison. But Amazon seems

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<v Speaker 1>to be above the law. Journalist Joanna Brien first broke

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<v Speaker 1>this story for The l A. Times. She wrote, quote

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<v Speaker 1>Amazon at times deeps into the tips earned by contracted

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<v Speaker 1>delivery drivers to cover their promised to pay. A Times

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<v Speaker 1>review of emails and receipts reveals Amazon guarantees third party

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<v Speaker 1>drivers for its Flex program a minimum of eighteen dollars

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<v Speaker 1>to twenty five dollars per hour, but the entirety of

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<v Speaker 1>that payment doesn't always come from the company. If Amazon's

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<v Speaker 1>contribution doesn't reach the guaranteed wage, the e commerce giant

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<v Speaker 1>makes up the difference with the tips from customers. According

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<v Speaker 1>to documentation shared by five drivers. In emails to drivers,

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<v Speaker 1>Amazon acknowledges it can use any supplemental earnings to meet

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<v Speaker 1>the promised minimum should the company's own contribution for short.

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<v Speaker 1>Amazon insists that the drivers received the entirety of their tips,

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<v Speaker 1>but they declined to answer questions about whether it uses

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<v Speaker 1>those tips to help the drivers a base pay end quote.

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<v Speaker 1>An Amazon spokesperson named Amanda I wrote the following in

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<v Speaker 1>a statement, quote, our pay commitment to delivery drivers has

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<v Speaker 1>not changed since we launched the Amazon Flex program. Delivery

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<v Speaker 1>partners still earn eighteen dollars per hour, including one of tips,

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<v Speaker 1>and on average, drivers earn over twenty dollars per hour

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<v Speaker 1>end quote. Well, as we know, it seems like the

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<v Speaker 1>FTC disagrees with that. Now. Amazon conveniently doesn't actually provide

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<v Speaker 1>drivers with a breakdown of their tips and pay beyond

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<v Speaker 1>showing them their full payout. So the way some cunning

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<v Speaker 1>Amazon Flex drivers called Amazon out was by checking the

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<v Speaker 1>tips paid to them when delivering packages to their own houses.

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<v Speaker 1>One driver, for example, tipped himself fifteen dollars and ninety

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<v Speaker 1>cents when delivering a package of paper towels to his

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<v Speaker 1>own home. When he checked his account two days later,

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<v Speaker 1>he saw that he was credited as receiving no tips

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<v Speaker 1>for the whole two hours shift that day, the one

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<v Speaker 1>where he tipped himself. When he put in a formal

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<v Speaker 1>complaint to Amazon about this, they adjusted his pay without

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<v Speaker 1>any explanation. Seemingly adding extra tips on top two. Now,

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<v Speaker 1>believe it or not, some of this is actually legal

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<v Speaker 1>in some places in America, reported by the l a

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<v Speaker 1>Times article quote, the practice is legal in some states.

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<v Speaker 1>The California Labor Codes Provision three five one, which targets

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<v Speaker 1>the practice, does not apply to contractors because they are

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<v Speaker 1>seen as independent business owners. In Seattle, a group of

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<v Speaker 1>drivers has contested the classification in appending class action lawsuit,

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<v Speaker 1>claiming they are actually treated as employees. Amazon would not

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<v Speaker 1>say whether it dips into drivers tips in California. End quote. Now,

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<v Speaker 1>eventually Amazon was found out and this huge fire was

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<v Speaker 1>given to them. As we know, Amazon said they didn't

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<v Speaker 1>really accept what was levied at them, but they paid

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<v Speaker 1>the fire anyway. Here's what the FTC had to say

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<v Speaker 1>about it in a press release from one quote. According

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<v Speaker 1>to the FTC, these administrative complaints against Amazon and its subsidiary,

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<v Speaker 1>Amazon Logistics. The company regularly advertised that drivers participating in

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<v Speaker 1>the Flex program would be paid eighteen to twenty five

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<v Speaker 1>dollars per hour for their work making deliveries to customers.

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<v Speaker 1>The ads, along with the numerous other documents provided to

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<v Speaker 1>Flex drivers, also prominently featured statements such as you will

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<v Speaker 1>receive one percent of the tips you earn while delivering

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<v Speaker 1>with Amazon Flex. Rather than passing along one percent of

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<v Speaker 1>customers tips to drivers as it had promised to do,

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<v Speaker 1>Amazon used the money itself. Our action today returns to

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<v Speaker 1>drivers the tens of millions of dollars in tips that

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<v Speaker 1>Amazon misappropriated, and requires Amazon to get drivers permission before

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<v Speaker 1>changing its treatment of tips in the future. Pend quote.

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<v Speaker 1>To get an idea of what it's like working as

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<v Speaker 1>an Amazon Flex driver, I spoke to someone that is

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<v Speaker 1>currently still working for them. We'll call him Bob. Bob

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<v Speaker 1>believes that he had tips stolen from him in the past,

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<v Speaker 1>and he has several other grievances with Amazon's Flex driver program.

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<v Speaker 1>Let's see what he had to say. They have not

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<v Speaker 1>exactly been fair. They've not been treating you guys right.

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<v Speaker 1>The biggest issue is Amazon will dispatch stuff late or

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<v Speaker 1>they'll they'll be whether delays or a myriad of issues.

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<v Speaker 1>And when it comes right down to it, every time

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<v Speaker 1>something is late, they automatically blame the drivers for it

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<v Speaker 1>and then punish the drivers for it. There's no middleman.

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<v Speaker 1>You can try and appeal it, but the only time

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<v Speaker 1>I've ever been successfully appealed anything is to go to

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<v Speaker 1>their escalations department because all of their support is offshore

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<v Speaker 1>now and people don't understand or they just don't care.

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<v Speaker 1>I mean, I'll get emails like, oh, well, we're not

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<v Speaker 1>going to investigate this issue. It's like, I understand that

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<v Speaker 1>I'm a contracted person and I'm not an Amazon employee,

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<v Speaker 1>but where is the fairness in this? So, for example,

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<v Speaker 1>yesterday they took a whole Food's order and I had

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<v Speaker 1>taken three previous orders and gone back to the location,

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<v Speaker 1>and they gave me an order that was literally sitting

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<v Speaker 1>on the shelf when I said of the first time.

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<v Speaker 1>And now it's late, and now I'm being blamed for

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<v Speaker 1>the late delivery, even though they could have dispatched it

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<v Speaker 1>to me when I was there the first time. But

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<v Speaker 1>they're holding me accountable for the late delivery. And and

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<v Speaker 1>the same holds true for if packages go missing, it's

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<v Speaker 1>the driver's fault. If the package is damaged, it's the

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<v Speaker 1>driver's fault. I left packages at the location because they

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<v Speaker 1>were damaged, and I'm still being held accountable for him.

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<v Speaker 1>It's like I never even left your store, right, So

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<v Speaker 1>they are essentially not paying you correctly for things that

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<v Speaker 1>you haven't done correct and then they will you know,

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<v Speaker 1>they call it deactivating you. They will deactivate you for

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<v Speaker 1>late deliveries or for stuff that you can't get the

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<v Speaker 1>livered because people don't answer their phones, or there's no

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<v Speaker 1>safe place to leave it and you have to take

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<v Speaker 1>it back to the location. But that's your fault because

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<v Speaker 1>the customer was on cooperative. They call it deactivating. What

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<v Speaker 1>does that mean? They don't gonna work with you again? Okay,

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<v Speaker 1>So you get all of your stuff through an application.

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<v Speaker 1>It's called Amazon Flex, and if they decide that they

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<v Speaker 1>don't want you to work for them anymore, they de

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<v Speaker 1>activate your account and you can't get worked. They'll send

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<v Speaker 1>you an email that says you've been deactivated for such

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<v Speaker 1>such a reason, and happy trails. So, as Bob just

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<v Speaker 1>explained that if anything happens to the postle, even if

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<v Speaker 1>it's not the driver's fault, they will get penalized for

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<v Speaker 1>it and maybe even deactivated. What an Orwellian term. Anyway,

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<v Speaker 1>let's hear what Bob had to say about the tip

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<v Speaker 1>stealing scandal at Amazon Flex. Drivers. Amazon, we're taking tips

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<v Speaker 1>from drivers and using those tips to make the other

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<v Speaker 1>drivers wages a little better. So they weren't actually us

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<v Speaker 1>the tips that we were getting. They were they were

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<v Speaker 1>dispersing the tips elsewhere. I mean, I had only worked

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<v Speaker 1>for Amazon for six months at that point, and I

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<v Speaker 1>got a seven page or check from the FTC because

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<v Speaker 1>that's how much they had taken out of my tips.

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<v Speaker 1>I know drivers that got seventeen thousand dollar checks because

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<v Speaker 1>Amazon was stealing that much of their income. Imagine that

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<v Speaker 1>your own employer is stealing tens of thousands of dollars

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<v Speaker 1>from you when they're already one of the richest companies

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<v Speaker 1>on Earth. That's Amazon for you. The FTC dispersed sixty

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<v Speaker 1>eight million dollars of funds drivers. I still think they're

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<v Speaker 1>honestly doing it. And the reason I say that is

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<v Speaker 1>my my tips always come out as a round number.

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<v Speaker 1>It's never like, you know, five dollars and seventeen cents.

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<v Speaker 1>It's always five dollars or seven dollars. And you notice

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<v Speaker 1>this because sometimes you only get one delivery on your

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<v Speaker 1>block and you'll get a five dollar tip, but it's

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<v Speaker 1>always round numbers or on a fifth descent. But it's never,

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<v Speaker 1>you know, se cents or something like that. It's it's

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<v Speaker 1>just a little kind of hanky, you know what I mean.

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<v Speaker 1>Bob thinks Amazon is still possibly stealing from his tips.

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<v Speaker 1>We don't know, we can't verify that, but that's Bob's hunch.

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<v Speaker 1>There are other things that are bothering him as well.

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<v Speaker 1>I've listened to this so like Amazon will. Most recently

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<v Speaker 1>they have opened up what they call same day deliveries,

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<v Speaker 1>so people will get their order within twenty four hours

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<v Speaker 1>and it will come out of a central warehouse. And um,

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<v Speaker 1>quite often they'll give you a four and a half

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<v Speaker 1>hour block and they'll expect you to deliver upwards of

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<v Speaker 1>fifty packages in their foin half hours, and quite often.

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<v Speaker 1>I mean I've been doing delivery and dispatches stuff for

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<v Speaker 1>twenty five years. I know this kind of work. So

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<v Speaker 1>they are overloading us first of all, and then when

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<v Speaker 1>you run over, you have to literally email and email

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<v Speaker 1>and email and email to get over each payments from them,

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<v Speaker 1>and half the time like they're like, well, we paid

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<v Speaker 1>you for the block you've worked, and and you know

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<v Speaker 1>you're not talking a lot of money, You're talking fifty bucks.

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<v Speaker 1>But when it happens we after weekly, it adds up.

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<v Speaker 1>So you're you're constantly fighting to get those little bits

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<v Speaker 1>of money, and Amazon it's like, well, we paid you

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<v Speaker 1>for the money or at the time it worked. And

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<v Speaker 1>then if you have to take stuff back to the warehouse,

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<v Speaker 1>like an undeliverable package or something that's damage or something,

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<v Speaker 1>they're not going to pay you for that time either.

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<v Speaker 1>So basically, what Bob is saying here is that there

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<v Speaker 1>are parts of the Amazon Flex delivery driver role that

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<v Speaker 1>you just have to fulfill. For example, if you have

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<v Speaker 1>to take a parcel back to the warehouse, stuff like that,

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<v Speaker 1>but they're not paying them for this time. Every single

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<v Speaker 1>second that they're working on that job is time working

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<v Speaker 1>under the Amazon Flex program. They should be paid for

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<v Speaker 1>that every second. In my opinion, they're expecting you to

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<v Speaker 1>drive across the city to deliver back to their warehouse

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<v Speaker 1>and they are not going to pay. How does that

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<v Speaker 1>make you feel? You know, you're working this, you're trying

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<v Speaker 1>to make a living. How do you feel about all

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<v Speaker 1>this kind of shitty? To be honest, I mean, you know,

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<v Speaker 1>I do this work because I've had some physical injuries

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<v Speaker 1>and I'm able to do this. There's other stuff that

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<v Speaker 1>I can't do. I mean, I don't have a real

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<v Speaker 1>cupe education or anything like that. So you know, and

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<v Speaker 1>I live in an area that the prices have skyrocketed,

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<v Speaker 1>so you know, this is the best that I can do.

0:14:20.000 --> 0:14:24.440
<v Speaker 1>And you know, in some days it's just like it

0:14:24.560 --> 0:14:26.640
<v Speaker 1>really feels like your noses to the grindstone, you know

0:14:26.640 --> 0:14:28.520
<v Speaker 1>what I mean. I don't have any version of working.

0:14:29.000 --> 0:14:30.680
<v Speaker 1>Some people might say, well, why why don't you just

0:14:30.720 --> 0:14:32.400
<v Speaker 1>work somewhere else, you know, or you can be a

0:14:32.440 --> 0:14:34.640
<v Speaker 1>contract you know, what would you say to that? They

0:14:34.680 --> 0:14:38.400
<v Speaker 1>shut down Colorado almost completely during the pandemic, And this

0:14:38.440 --> 0:14:40.280
<v Speaker 1>is one of the few ways that I can make money.

0:14:40.600 --> 0:14:42.760
<v Speaker 1>And I mean there's other services out there that you

0:14:42.800 --> 0:14:44.880
<v Speaker 1>can work through. You can do grump up or uber

0:14:45.000 --> 0:14:46.560
<v Speaker 1>or left, but you know a lot of that depends

0:14:46.600 --> 0:14:50.560
<v Speaker 1>on your vehicle size or the age of your vehicle

0:14:50.560 --> 0:14:53.360
<v Speaker 1>and stuff like that, so there's constraints on that. Amazon

0:14:53.360 --> 0:14:55.160
<v Speaker 1>doesn't really care what you're driving, as long as you

0:14:55.160 --> 0:14:56.960
<v Speaker 1>can cram as much crap in your car as you

0:14:57.000 --> 0:15:00.640
<v Speaker 1>can and deliver it. You know, they also of precedents

0:15:00.680 --> 0:15:03.280
<v Speaker 1>to new drivers, so they'll you know, I've been doing

0:15:03.280 --> 0:15:05.840
<v Speaker 1>this for three years. Um, I've got friends that have

0:15:05.880 --> 0:15:09.520
<v Speaker 1>been doing it since the program started, and they'll hire,

0:15:09.680 --> 0:15:11.560
<v Speaker 1>you know, fifty new drivers and give them all the

0:15:11.600 --> 0:15:14.200
<v Speaker 1>work and let the drivers that have been doing it

0:15:14.240 --> 0:15:17.360
<v Speaker 1>consistently for years sit there and start for a week.

0:15:17.760 --> 0:15:19.960
<v Speaker 1>The kind of cherry on top of the cake is

0:15:20.160 --> 0:15:24.000
<v Speaker 1>the support system that they have. We we don't have

0:15:24.080 --> 0:15:26.880
<v Speaker 1>any way to actually talk to the people dispatching the runs.

0:15:27.440 --> 0:15:32.040
<v Speaker 1>We have UM Driver's Support, which, you know, you you

0:15:32.080 --> 0:15:34.360
<v Speaker 1>contact them through the app and you get a phone

0:15:34.360 --> 0:15:39.200
<v Speaker 1>call back. And these people are untrained. They have no

0:15:39.320 --> 0:15:42.600
<v Speaker 1>clue what we're actually trying to do. UM they don't

0:15:42.640 --> 0:15:44.560
<v Speaker 1>even know that, you know. They're like, well, you can

0:15:44.600 --> 0:15:46.200
<v Speaker 1>just deliver it later. It's like, well, I'm not being

0:15:46.200 --> 0:15:48.920
<v Speaker 1>paid to deliver the package later. They're like, what do

0:15:48.960 --> 0:15:51.080
<v Speaker 1>you mean. It's like, well, I'm thirty miles from home.

0:15:51.120 --> 0:15:52.680
<v Speaker 1>I Am not going to go home and try and

0:15:52.720 --> 0:15:55.760
<v Speaker 1>deliver someone's package in two hours. I'm not being paid

0:15:55.760 --> 0:15:59.760
<v Speaker 1>for that, you know. And on top of that is

0:15:59.800 --> 0:16:02.200
<v Speaker 1>the time the gas and everything else. No, I mean,

0:16:02.320 --> 0:16:04.800
<v Speaker 1>either the people get their package or it goes back

0:16:04.800 --> 0:16:07.800
<v Speaker 1>to the world. It's a binary solution set on that

0:16:07.960 --> 0:16:10.240
<v Speaker 1>because they're not going to give us any additional money

0:16:10.240 --> 0:16:12.080
<v Speaker 1>to hang out to make sure that their packages are

0:16:12.120 --> 0:16:15.280
<v Speaker 1>delivered um and then they're like, well, if you have

0:16:15.280 --> 0:16:18.760
<v Speaker 1>a problem with that, email ourproath support. So hopefully after

0:16:18.840 --> 0:16:21.400
<v Speaker 1>listening to Bob there, you realize that next time you

0:16:21.400 --> 0:16:24.480
<v Speaker 1>want to get really angry with your Amazon delivery driver

0:16:24.760 --> 0:16:28.480
<v Speaker 1>or whoever else's probably not their fault. As we've just heard,

0:16:28.560 --> 0:16:32.680
<v Speaker 1>Amazon and not supplying them with the proper infrastructure they need,

0:16:32.720 --> 0:16:35.120
<v Speaker 1>they're not paying them properly, and as we heard at

0:16:35.120 --> 0:16:38.240
<v Speaker 1>the top of the episode, they were literally stealing money

0:16:38.240 --> 0:16:41.400
<v Speaker 1>from them. The delivery driver is not the enemy, I

0:16:41.480 --> 0:16:46.320
<v Speaker 1>promise you. Next week is the final episode of Megacorp,

0:16:46.640 --> 0:16:49.760
<v Speaker 1>will be taking a look back over everything we've learned

0:16:49.760 --> 0:16:56.600
<v Speaker 1>in this series. Megacorp is made by my production company

0:16:56.880 --> 0:17:02.360
<v Speaker 1>H eleven for Cool Zone Media, Written, researched and produced

0:17:02.400 --> 0:17:07.800
<v Speaker 1>by myself, Jake Hanrahan. It was also produced by Sophie Lichtman.

0:17:09.160 --> 0:17:13.399
<v Speaker 1>Music is by Some Black, graphics by Adam Doyle and

0:17:13.480 --> 0:17:17.239
<v Speaker 1>sound engineering by Splicing Block. If you want to get

0:17:17.280 --> 0:17:22.440
<v Speaker 1>in touch, follow me on social media at Jake Underscore Hanrahan.

0:17:22.960 --> 0:17:26.480
<v Speaker 1>That's h A N A A h A N