Walmart agrees to $100 million settlement over deceptive payment practices in Spark Driver

Walmart has agreed to pay $100 million to settle an FTC lawsuit over deceptive payment practices within its Spark Driver service, which uses gig workers to deliver online orders from local stores to customers. The retailer was accused of misleading drivers about their potential base salaries and tip amounts, then deceiving customers by saying 100% of the tips went to the drivers, when they did not.

In its original complaint, the FTC was joined by the states of Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin. The lawsuit alleged that Walmart, starting in 2021, made false statements about Spark Driver’s earnings.

Among these, Walmart has been accused of repeatedly splitting a customer’s order between drivers, potentially splitting tips. Meanwhile, customers were told that their driver – as in one driver – would receive the full tip. On bulk orders, Walmart removes tips from some orders without informing the driver. Walmart also promised tips to drivers before taking orders, but then failed to collect a tip from the customer, leaving the driver completely untipped.

Other issues relate to cuts Walmart made to drivers’ base pay after they accepted an offer or other distorted incentives that could have provided drivers with extra money.

Walmart also told customers that drivers would receive 100% of the tips, but that wasn’t always true.

The lawsuit alleged that these practices caused drivers to lose millions of dollars they were promised and caused thousands of consumer complaints.

As a result of the settlement, Walmart will have to implement an earnings verification program to ensure drivers receive promised earnings and tips. It is also prohibited to modify the basic salary, incentives or tips after the initial offer, unless the driver fails to provide the service or the customer cancels the service. Walmart was prohibited from misrepresenting profits in future drivers’ offers as well.

“Labor markets cannot function efficiently without truthful and non-misleading information about earnings and other material conditions,” Christopher Mouvrage, director of the FTC’s Bureau of Consumer Protection, said in a statement about the settlement agreement. “Today’s settlement reflects the Trump-Vance FTC’s focus on ensuring a healthy labor market for American workers, which is critical to the nation’s success.”