Fli-Lo Falcon LLC, a transportation and logistics company which entered into a contract to deliver packages for Amazon Logistics Inc. (ALI), has filed suit against the company over broken promises related to Amazon’s “Delivery Service Partners” (DSP) program and contract. The Seattle, Washington-filed complaint asserts that Amazon falsely offers DSPs much more revenue and autonomy than they actually receive in violation of Washington’s Franchise Investment Protection Act (FIPA).
The filing explains that DSPs contract with Amazon as small package deliverers, typically with a fleet of 20 to 40 Amazon-branded vans, and pursuant to a DSP agreement. According to the complaint, the purpose of the DSP Program “is to shield Amazon from its responsibilities to delivery drivers and the public.”
Fli-Lo argues that Amazon misrepresents two key aspects of its business agreements with DSPs. First, the complaint says that Amazon exaggerates the earnings DSPs can achieve. It allegedly advertises profits between $75,000 and $300,000 annually, yet as of February 2022, the average annual pay for an Amazon DSP was $63,874 per year.
Second, the lawsuit accuses Amazon of misrepresenting the degree of control DSPs exercise over their businesses, stating that their operations are “dictated and run by Amazon through ALI.” The filing also urges that DSPs must make capital investments and use certain vendors under Amazon’s terms.
Further, DSPs are restricted from making material adjustments to increase their profits though they retain liability for acts of their drivers, who are pressed to meet the delivery schedules prescribed by ALI. Finally, the complaint says, DSPs are assessed exit costs by ALI if they try to end their participation in the DSP program.
The complaint contends Amazon engaged in fraud and fraudulent inducement, breached the implied covenant of good faith and fair dealing, and violated the state of Washington’s Consumer Protection Act based on violations of its FIPA. It seeks certification of a class of DSPs, of which there were approximately 2,500 as of December 2021, and damages on their behalf.