Walmart Inc. has agreed to pay $100 million to resolve allegations by the Federal Trade Commission and 11 states that it deceived gig workers in its Spark Driver delivery program about how much they would earn in base pay, tips and incentives.
The settlement, filed Thursday in U.S. District Court for the Northern District of California, resolves claims that Walmart inflated earnings shown to drivers through its Spark app and misled customers by promising that “100% of tips go to the driver.”
The coalition of states joining the FTC includes Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin.
In its complaint, regulators alleged that Walmart displayed tip amounts to drivers that were not preauthorized and sometimes failed to materialize if a customer’s payment did not go through. The company also allegedly split tips among multiple drivers when deliveries were divided, without clearly informing workers.
Authorities further alleged that Walmart reduced base pay and tips when it modified “batched” delivery offers — jobs combining multiple customer orders — sometimes without notifying drivers until after the deliveries were completed. The complaint also accused Walmart of misrepresenting bonus incentives and failing in some cases to pay drivers who met the stated conditions.
Regulators said the practices cost drivers tens of millions of dollars in lost earnings and, in some instances, resulted in customers being charged tips that were not passed on to drivers or refunded.
Under the proposed court order, Walmart must implement an earnings verification program to ensure drivers receive promised pay and is barred from misrepresenting delivery offer terms. The company is also restricted from modifying pay terms after an offer is accepted, except in limited circumstances such as order cancellations.
The FTC vote to authorize the complaint and settlement was 2-0. The agreement requires approval by a federal judge.
