Quick Facts
- Walmart will pay $100 million to settle FTC and 11-state allegations over deceptive driver pay practices in its Spark delivery program
- Up to $79 million goes directly to drivers, with nearly one million drivers having made 272 million deliveries through the program
- Settlement requires Walmart to implement earnings verification and prohibits adjusting pay after initial offers for next 10 years
Walmart agreed to pay $100 million to settle Federal Trade Commission allegations that it deceived delivery drivers about their pay and tips in the Spark Driver program.
The FTC, joined by 11 states including California, Illinois, and Pennsylvania, claimed Walmart caused drivers to lose tens of millions of dollars in earnings through misleading practices. Up to $79 million will go directly to affected drivers, while $21 million covers civil penalties and customer restitution.
The settlement covers nearly one million drivers who made 272 million deliveries through Spark since its 2018 launch. The program operates across more than 4,200 Walmart stores with 17,000 pickup points nationwide.
Deceptive Practices Alleged
The FTC complaint outlined four key deceptive practices. Walmart failed to tell drivers that tip payments were not preauthorized, meaning drivers wouldn’t receive tips if customer payments failed. The company also split tips between multiple drivers without disclosure.
Walmart reduced base pay and tips when removing orders from batched deliveries, often notifying drivers only after completion. The retailer also failed to disclose conditions for incentive pay, including referral bonuses that required new drivers to work in specific zones.
“Labor markets cannot function efficiently without truthful and non-misleading information about earnings,” said Christopher Mufarrige, Director of the FTC’s Bureau of Consumer Protection.
Business Impact
Walmart shares rose 2.84% to $127.95 following the settlement announcement, outperforming the broader market. Analysts view the $100 million cost as manageable for Walmart’s operations, though reputational concerns remain.
Delivery has driven Walmart’s e-commerce success, with Express Delivery growing over 60% year-over-year. The company’s global e-commerce operations expanded 24% last year, exceeding $150 billion in sales.
Compliance Requirements
Under the settlement, Walmart must implement earnings verification programs and cannot adjust pay after initial offers except for service failures or customer cancellations. The company must submit annual FTC reports for 10 years documenting driver payment accuracy.
“We value the hard work and dedication of the drivers who deliver great service and products to our customers,” Walmart said in a statement. “We have issued payments to affected drivers and continue to make additional payments as appropriate.”
The action follows similar FTC cases against Amazon’s Flex program, which resulted in $60 million in driver reimbursements, and a $25 million Grubhub settlement over delivery costs and driver earnings.
