Attorney General Mayes, FTC Reach $100 Million Multistate Settlement with Walmart for Deceiving Drivers and Customers Over Delivery Issues
PHOENIX – Attorney General Kris Mayes and a bipartisan group of attorneys general and the Federal Trade Commission (FTC) reached a $100 million multistate settlement with Walmart today over allegations that the company deceived customers and drivers who participated in its Spark Driver Program.
"When customers leave a tip, they expect it to reach the worker who earned it. When workers are promised pay, they expect to receive it," said Attorney General Mayes. "This settlement makes both of those things right — and puts money back in the pockets of the drivers who deserved it all along."
Walmart has run the Spark Driver program since 2018. Customers can use the Spark App to order products from Walmart for home delivery, and people can sign up to be drivers on the app. Drivers pick up products from Walmart stores and deliver them to customers, and they use the app to view and select offers to complete deliveries for payment. These offers include an estimate of how much the driver will earn from the delivery, including the base amount Walmart will pay the driver and any pre-tip the customer has selected to pay. Walmart also offers incentive pay if drivers complete deliveries within a specific period of time or in a particular area, complete a certain number of deliveries, or refer a new driver. Almost a million drivers have made 272 million deliveries nationwide through the program.
Today’s settlement resolves allegations that Walmart misrepresented pre-tip amounts, base pay, and incentive pay to drivers. While Walmart showed one offer to the driver, they would split or change parts of the order after the driver accepted the offer and ultimately, the driver received less than the base pay or the full tip or the base pay. Walmart also failed to pay drivers for completing incentives by not disclosing the full incentive requirements.
Walmart also allegedly deceived customers into thinking that 100 percent of their tip would go to drivers when, in fact, the company didn’t always pass on the full tips to the drivers and sometimes kept them entirely.
As part of the $100 million judgment included in the settlement, Walmart will pay or already has paid up to $79 million directly to drivers. In addition, the company is paying a total of $11 million to the states and an additional $10 million to the FTC. Walmart will also have to operate an earnings verification program and submit an annual report to the FTC for the next 10 years to make sure drivers are being paid what they were promised, and the company is prohibited from modifying orders after drivers accept them or misrepresenting how much a driver will earn from an offer.
Attorney General Mayes is joined in reaching this settlement by the FTC, the Attorneys General of Colorado, Illinois, Michigan, North Carolina, Oklahoma, Pennsylvania, South Carolina, Utah and Wisconsin.
A copy of the proposed settlement is available HERE.