NAIROBI, Kenya, Feb 27 – Walmart has agreed to pay $100m (£74.1m) to settle claims that it misled gig workers who signed up to deliver packages for the company about the pay and tips they would receive.
The deal was announced by the Federal Trade Commission (FTC) and a group of 11 states, of leaving the drivers on its Spark Driver app tens of millions of dollars out of pocket.
The company also falsely told customers that their tips would go completely to drivers, according to the complaint.
Walmart said it was improving its systems to “ensure fairness and transparency” and had already started making payments to people who had been affected.
Delivery drivers are due to receive $79m worth of payouts from the settlement, according to FTC leaders. Walmart did not respond to a question about how much on average each driver would receive.
“We value the hard work and dedication of the drivers who deliver great service and products to our customers,” the company said in a statement.
Walmart launched its Spark Driver service in 2018, as it pushed to make its online ordering and delivering services more competitive.
More than a million different people have since made deliveries for the firm via the app, which ranks as one of the largest last-mile delivery services in the US.
The FTC said discrepancies between the pay the company told drivers they could expect and what they actually received arose consistently in certain scenarios, such as when the company split up customer orders into multiple deliveries or changed how packages were distributed among delivery jobs.
The problems date back to at least 2021 and have prompted thousands of complaints, becoming “known problems” within Walmart, according to the claim, which was filed in federal court in California.
“Rather than address these well-known issues, however, Walmart has persisted in these practices and continues to attract and retain drivers and customers to Spark with false earning claims and misleading representations,” it said.
FTC leaders said Walmart started repaying drivers after the agency approached the company with its concerns last year.
Walmart also agreed to pay $10m to the FTC and $11m to the states.
“Labour markets cannot function efficiently without truthful and non-misleading information about earnings and other material terms,” Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said in announcing the deal.
The agreement also includes an order barring Walmart from changing its initial offer of compensation for jobs, except under limited circumstances.
The terms represent “significant changes to Walmart’s business practices to ensure that Walmart never does anything like this again”, FTC Chairman Andrew Ferguson and Commissioner Mark Meador said in a joint statement announcing the settlement.
By BBC
