Topline
Two historically low-income neighborhoods in Washington, D.C., have been secretly excluded from Amazon’s expedited delivery service over the last two years, despite residents paying millions of dollars for the company’s Prime membership, a lawsuit filed Wednesday alleges.
The company instead relied on third-party delivery services like UPS to make Prime deliveries, a new … [+]
Key Facts
In a lawsuit filed in the D.C. Superior Court, Attorney General Brian Schwalb alleges Amazon made a “secret internal decision” in June 2022 to stop using its delivery service for the 20019 and 20020 ZIP codes in Washington, D.C., which the company knew would result in “significantly” slower deliveries.
Amazon misled customers from those neighborhoods about the value of the company’s $139-a-year Prime membership and failed to notify them of or acknowledge slower deliveries, Schwalb claims.
Instead of using the company’s delivery service, Amazon instead outsourced deliveries to UPS and the U.S. Postal Service, according to the lawsuit.
Because of Amazon’s exclusion, only 25% and 24% of Prime packages were delivered to 20019 and 20020 within two days, respectively, after more than 72% were delivered before the exclusion was implemented.
Schwalb has requested the D.C. Superior Court to “put an end to Amazon’s deceptive conduct” by prohibiting the company from making misleading statements about its services in the two neighborhoods, in addition to damages and other penalties that would be determined at trial.
Amazon spokesperson Kelly Nantel told Forbes the claims by Schwalb are “categorically false” while noting there have been “specific and targeted acts” against Amazon delivery drivers in the two ZIP codes, requiring the company to “adjust our operations,” including delivery routes and times, to ensure driver safety.
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Big Number
48,000. That’s the estimated number of paying Prime members affected by the slower deliveries, according to Schwalb.
Crucial Quote
Amazon “cannot covertly decide that a dollar in one ZIP code is worth less than a dollar in another,” Schwalb said in a statement.
Key Background
Amazon has previously been accused of slower deliveries to lower-income neighborhoods over the last decade. In 2016, Bloomberg reported low-income and predominantly Black neighborhoods in Boston, Atlanta, Chicago and other cities experienced slower Prime deliveries. At the time, Amazon said the “safety of our employees is a top priority” but did not respond to claims about slower deliveries. Craig Berman, Amazon’s vice president for global communications, told Bloomberg the company did not analyze data about the ethnic composition or income of neighborhoods. Amazon faces other claims about its Prime service: The Federal Trade Commission sued Amazon in June 2023, accusing the company of duping millions of customers into enrolling in Prime memberships without their consent. Amazon said the FTC’s claims are “false,” adding it was “clear and simple” for customers to both sign up for and cancel their Prime membership. That case is scheduled to go to trial in June 2025.
