Amazon made a splash on social media this month, announcing that customers could give their delivery driver a $5 tip, paid for by Amazon, by telling Alexa to “thank my Amazon driver.”
But it wasn’t the season of giving that inspired this act of kindness. The promotion appears to be Amazon’s latest attempt to varnish its reputation and distance itself from something Bloomberg called “a litany of complaints about below-market pay, unreasonable hours and a toxic culture.”
Late last year, Amazon agreed to reimburse 140,000 drivers nearly $60 million it skimmed from their tips between 2016 and 2019, according to the Federal Trade Commission. Amazon settled the case without admitting guilt. But Washington DC’s attorney general is now seeking civil penalties to compensate customers who thought their gratuities were going to drivers.
With the spotlight shining on Amazon brighter than ever, it will undoubtedly live up to its promise this year and hand out roughly $5.1 million worth of tips to drivers. But it’s important to understand the message this promotion unwittingly sends. Instead of simply paying out bonuses, Amazon pulled a publicity stunt that let everyone know its drivers are underpaid. Amazon also spent more than $4.3 million on anti-union consultants last year, quashing most local unionization efforts across the country, according to Techcrunch.
This situation highlights an area of ESG that is sometimes overshadowed by environmental concerns—the safety, wellbeing and fair treatment of workers, which falls under the Social heading in ESG. As one of the largest employers in the US, Amazon is under intense scrutiny by lawmakers, regulators, investors and worker advocacy groups. And these groups have been particularly concerned about the online retailer’s treatment of warehouse workers and delivery drivers.
One of the lowest points in its checkered labor history came in 2011, when a Pennsylvania newspaper revealed that a local Amazon fulfillment center hired paramedics and ambulances to stand by during a summer heat wave. “Workers who collapsed were removed with stretchers and wheelchairs and taken to hospitals,” the New York Times reported. More recently, Amazon was widely ridiculed for announcing it announced it planned to equip warehouses with “wellness chambers”—soundproof pods where employees could spend time de-stressing.
In fact, Amazon’s culture was so toxic and its employee turnover rate was so high in mid-2021 that executives were worried about running out of workers, completely draining, “the available labor supply” in three years, according to an internal memo obtained by the news website Vox.
As founder Jeff Bezos was stepping down from his position as CEO last year, a spokesperson said Amazon would do some soul searching and the company pledged to become “Earth’s Best Employer.”
As this latest stunt shows, it still has a long way to go.