Walmart has agreed to pay $100m to resolve claims that it misled delivery drivers about expected earnings and tips on its Spark Driver platform, with $79m set aside for payouts to drivers and additional payments to federal and state authorities. The settlement was announced by the Federal Trade Commission and 11 states, which alleged that drivers were left tens of millions of dollars out of pocket.
Allegations Over Pay And Tips
The complaint, filed in federal court in California, said Walmart gave drivers inaccurate information about how much they could expect to earn and falsely told customers that tips would go entirely to drivers. The FTC said discrepancies between promised and actual pay occurred consistently in certain scenarios, including when customer orders were split into multiple deliveries or when packages were redistributed among delivery jobs.
The issues date back to at least 2021 and led to thousands of complaints, which the filing described as known problems within the company. The complaint said Walmart continued to attract and retain drivers and customers to the Spark platform with false earning claims and misleading representations rather than addressing those issues.
Settlement Terms And Payments
Under the agreement, $79m will be distributed to delivery drivers, according to FTC leaders. Walmart did not respond to a question about the average payout per driver. The company will also pay $10m to the FTC and $11m to the participating states.
FTC officials said Walmart began repaying drivers after the agency raised concerns last year. Christopher Mufarrige, director of the FTC’s Bureau of Consumer Protection, said labour markets cannot function efficiently without truthful and non misleading information about earnings and other material terms.
The settlement includes an order that bars Walmart from changing its initial offer of compensation for jobs except under limited circumstances. FTC Chairman Andrew Ferguson and Commissioner Mark Meador said in a joint statement that the terms require significant changes to Walmart’s business practices to prevent similar conduct in the future.
Company Response And Platform Background
Walmart said it is improving its systems to ensure fairness and transparency and that it has already started making payments to affected individuals. In a statement, the company said it values the work of drivers who deliver products and services to customers.
Walmart launched Spark Driver in 2018 as part of efforts to expand its online ordering and delivery operations. More than one million people have made deliveries through the app, which is among the largest last mile delivery services in the United States.
Featured image credits: Wikimedia Commons
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