District of Columbia says Amazon secretly stopped fast deliveries to 2 predominantly Black ZIP codes

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This article was published 04/12/2024 (679 days ago), so information in it may no longer be current.

The District of Columbia sued Amazon on Wednesday, alleging the company secretly stopped providing its fastest delivery service to residents of two predominantly Black neighborhoods while still charging millions of dollars for a membership that promises the benefit.

The complaint filed in District of Columbia Superior Court revolves around Amazon’s Prime membership, which costs consumers $139 per year or $14.99 per month for fast deliveries — including one-day, two-day and same-day shipments — along with other enhancements.

In mid-2022, the lawsuit alleges, the Seattle-based online retailer imposed what it called a delivery “exclusion” on two low-income ZIP codes in the district — 20019 and 20020 — and began relying exclusively on third-party delivery services such as UPS and the U.S. Postal Service, rather than its own delivery systems.

Amazon says it made the change based on concerns about driver safety.

“There have been specific and targeted acts against drivers delivering Amazon packages” in the two ZIP codes and the company made the change to “put the safety of delivery drivers first,” Amazon spokesperson Kelly Nantel said in a prepared statement.

“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 said. “The claims made by the attorney general, that our business practices are somehow discriminatory or deceptive, are categorically false.”

The District of Columbia’s attorney general’s office alleged the company never told Prime members in the two ZIP codes about the change even though they experienced slower deliveries as a result. Amazon also did not tell new customers about the exclusions when they signed up for Prime memberships, the lawsuit says.

“Amazon is charging tens of thousands of hard-working Ward 7 and 8 residents for an expedited delivery service it promises but does not provide,” District of Columbia Attorney General Brian Schwalb said in a statement, referencing the two areas in the city where Amazon is accused of excluding its speediest deliveries.

“While Amazon has every right to make operational changes, it cannot covertly decide that a dollar in one ZIP code is worth less than a dollar in another,” Schwalb said.

The lawsuit says Amazon has nearly 50,000 Prime members who live in the two ZIP codes, a number that represents nearly half of the population. Prime members in those neighborhoods have ordered more than 4.5 million packages in the past four years, and are more likely to rely on Amazon since they have fewer services and retail stores nearby, the city said. The area is also a notorious food desert.

The district says that in 2021, before Amazon implemented its delivery “exclusion,” more than 72% of Prime packages in the impacted ZIP codes were delivered within two days. But last year, it was only 24%, according to the complaint.

Meanwhile, the district’s lawsuit says Prime members who lived in other parts of the city received two-day deliveries 75% of the time. Amazon was also improving its delivery speeds nationwide.

When some customers in the city complained about the slower deliveries, Amazon concealed the true reason for the delays and “deceptively implied” that the delays “were simply due to natural fluctuations in shipping circumstances, rather than an affirmative decision by Amazon,” the lawsuit says.

District officials are asking the court to issue an order prohibiting Amazon from “engaging in unfair or deceptive practices.” They also want the company to pay restitution or damages to affected Prime members, as well as civil penalties.

This isn’t the first time Amazon has been accused of offering slower deliveries to some places where Black people make up most of the households.

In 2016, American news outlet Bloomberg published an investigation that said Black residents of cities like Atlanta and Chicago were about half as likely as white residents to live in neighborhoods with access to Amazon’s same-day delivery service.

Local news website DCist reported a year later that Amazon’s restaurant delivery service – which the company shut down five years ago – had excluded some neighborhoods in Washington, including one of the ZIP codes mentioned in the district’s lawsuit.

Nantel said Amazon is “always transparent” with its customers “during the shopping journey and checkout process about when, exactly, they can expect their orders to arrive.”

Since 2022, nearly 1.5 million Prime-eligible products were delivered in two days or less to Prime customers residing in the two ZIP codes, the company said.

“What we’d like to do, and have offered, is to work together with the attorney general and their office in an effort to reduce crime and improve safety in these areas,” Nantel aid. “Nevertheless, we will proceed in the process and demonstrate that providing fast and accurate delivery times and prioritizing the safety of customers and delivery partners are not mutually exclusive.”

The complaint filed Wednesday represents the second major legal battle between Amazon and the District of Columbia which also filed an antitrust lawsuit against the company.