Walmart to pay $100 million to settle claims over Spark Driver pay practices

Walmart has agreed to pay $100 million to resolve a lawsuit brought by the Federal Trade Commission (FTC) over alleged deceptive pay practices tied to its Spark Driver service, which relies on gig workers to deliver online orders from local stores to customers. Regulators accused the retailer of misleading drivers about potential base pay and tip amounts, and of misleading customers by claiming that 100% of tips went to drivers, even though, according to the complaint, that was not always the case.

The FTC’s original complaint was filed alongside a group of states — Arizona, California, Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah, and Wisconsin. The lawsuit alleged that Walmart, beginning in 2021, made false or misleading representations about what Spark Driver workers could expect to earn.

Among the allegations, Walmart was accused of routinely splitting a customer’s order between multiple drivers, which could result in the tip being split as well. At the same time, customers were allegedly told that their driver — implying a single driver — would receive the full tip. The complaint also said that for batch orders, Walmart removed tips from certain orders without notifying the driver. In other cases, Walmart allegedly promised drivers tips in advance of accepting deliveries but failed to collect a tip from the customer, leaving the driver with no tip.

The lawsuit also raised concerns about reductions Walmart allegedly made to drivers’ base pay after a driver accepted an offer, as well as other incentives that were allegedly misrepresented and could have suggested drivers would receive additional earnings.

Walmart also told customers that drivers would receive 100% of their tips, but the complaint alleged that this was not consistently true.

According to the lawsuit, these practices led drivers to lose millions of dollars they were promised and triggered thousands of consumer complaints.

Under the settlement, Walmart will be required to implement an earnings verification program intended to ensure drivers receive the earnings and tips they were promised. The agreement also prohibits Walmart from adjusting base pay, incentives, or tips after the initial offer, except in cases where a driver fails to provide the service or a customer cancels. Walmart is also barred from misrepresenting earnings in future driver offers.

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