Amazon Slowed Deliveries In Low Income Areas, Lied About Reason, Lawsuit Reveals

The larger issue is that many Prime customers around the country are not receiving packages within two days despite paying for that service. 

This lawsuit could be a precursor to that much bigger one. JL

Ashley Belanger reports in ars technica:

Amazon has been accused of secretly slowing down Prime deliveries in low-income parts of the District of Columbia and then lying to customers who complained. Schwalb said that Amazon should have notified users that fast delivery speeds—the primary subscriber perk— were not available to them before they paid full price for subscriptions. The attorney general has accused Amazon of unfairly discriminating against these residents while overcharging them for inferior services and thwarting them from finding better alternatives to suit their basic needs. Even after customers complained directly, "Amazon concealed" its business decision and "misled the consumers to believe it was a coincidence," 

Amazon has been accused of secretly slowing down Prime deliveries in low-income parts of the District of Columbia and then lying to customers who complained.

In a lawsuit filed on Wednesday, DC Attorney General Brian Schwalb alleged that Amazon violated a local consumer protection law by overcharging approximately 48,000 "historically underserved" people in "two ZIP codes east of the Anacostia River"—20019 and 20020—by millions after "secretly" changing how delivery services work in these areas.

According to Schwalb's press release, Amazon switched from using its in-house delivery service for the last mile of deliveries to these DC ZIP codes sometime in mid-2022 to "exclusively" using third-party services. These third-party services—such as USPS or UPS—are "often slower" than Amazon delivery drivers, and "Amazon knew" the switch "would result in significantly slower deliveries for residents living in these two ZIP codes yet it never informed existing or prospective Prime members living there of that exclusion," the release said.

Schwalb said that Amazon should have notified users that fast delivery speeds—the primary subscriber perk— were not available to them before they paid full price for subscriptions. This is especially harmful, Schwalb said, because low-income families live in these areas and depend on Amazon for basic necessities due to "fewer services and retail establishments nearby." The attorney general has accused Amazon of unfairly discriminating against these residents while overcharging them for inferior services and thwarting them from finding better alternatives to suit their basic needs.

These subscribers ordered 4.5 million packages in the past four years while gradually suffering inexplicably longer delivery times, Schwalb alleged. In 2023, only about 25 percent of packages arrived within two days, compared to 72 percent prior to Amazon's delivery change.

 

Amazon “concealed” real reason for delays

But even after customers complained directly, "Amazon concealed" its business decision and "misled the consumers to believe it was a coincidence," Schwalb alleged. For example, in one exchange on X (formerly Twitter), an Amazon subscriber complained that deliveries to their ZIP code took a week, while someone living three minutes away still received one-day deliveries, alleging that "Amazon doesn't want to deliver East of the River in DC." In response, Amazon told the subscriber that delays were "never on purpose," Schwalb's complaint said, and failed to flag their excluded ZIP code as the real reason for delays. In a statement to Ars, Amazon spokesperson Kelly Nantel said that claims that Amazon's "business practices are somehow discriminatory or deceptive" are "categorically false."

Nantel said that Amazon started using third-party services to deliver to these areas to "put the safety of delivery drivers first."

"In the ZIP codes in question, there have been specific and targeted acts against drivers delivering Amazon packages," Nantel said. "We made the deliberate choice to adjust our operations, including delivery routes and times, for the sole reason of protecting the safety of drivers."

Nantel also pushed back on claims that Amazon concealed this choice, claiming that the company is "always transparent with customers during the shopping journey and checkout process about when, exactly, they can expect their orders to arrive."

But that doesn't really gel with Schwalb's finding that even customers using Amazon's support chat were allegedly misled. During one chat, a frustrated user pointing out discrepancies between DC ZIP codes asked if Amazon "is a waste of money in my zip code?" Instead of confirming that the ZIP code was excluded from in-house delivery services, the support team member seemingly unhelpfully suggested the user delete and re-add their address to their account.

"Amazon has doubled down on its deception by refusing to disclose the fact of the delivery exclusion, and instead has deceptively implied that slower speeds are simply due to other circumstances, rather than an affirmative decision by Amazon," Schwalb's complaint said.

Schwalb takes no issue with Amazon diverting delivery drivers from perceived high-crime areas but insists that Amazon owes its subscribers in those regions an explanation for delivery delays and perhaps even cheaper subscription prices. He has asked for an injunction on Amazon's allegedly deceptive advertising urging users to pay for fast shipments they rarely, if ever, receive. He also wants Amazon to refund subscribers seemingly cheated out of full subscription benefits and has asked a jury to award civil damages to deter future unfair business practices. Amazon could owe millions in a loss, with each delivery to almost 50,000 users since mid-2022 considered a potential violation.