Some of the biggest gig economy employers in the U.S. are facing federal scrutiny for allegedly misleading potential employees about how well their gigs actually pay. The companies may be on the hook for significant fines over the matter.
Uber, Lyft, Instacart, GrubHub, Doordash and Amazon.com (which uses gig workers for delivery) are among more than 1,100 companies that the Federal Trade Commission (FTC) warned about making deceptive statements regarding their wage-earning potential, according to MarketWatch. The agency has seen a proliferation of communications from businesses touting unrealistic potential earnings throughout the pandemic. With many out of work and finding themselves in precarious financial situations, job seekers have been particularly vulnerable to such messaging. Were the companies to be penalized for the practice, it could cost $43,792 per violation. This could add up to fines in the billions of dollars for companies with national ad campaigns.
FTC representatives would not confirm to MarketWatch that any companies were under investigation. The commission has, however, moved against companies over misleading statements to employees before. It fined Uber in 2017 over false claims about earning potential on Craigslist ads and fined Amazon earlier this year over allegations of withholding tips.
While the latest round of accusations takes issue with how major gig employers are getting employees on board, many of the largest companies have already experienced public scrutiny for their treatment of active workers.
A recent study of 500 NYC rideshare drivers, conducted by a worker’s advocacy group, contains the claim that 42 percent of drivers experienced underpayment or non-payment. Workers at both Instacart and DoorDash have recently undertaken labor actions to bring awareness to issues like mistreatment and underpayment.
Even the designation of rideshare drivers as “gig workers” has come under fire, as labor groups have backed legislation in various states to demand such workers be treated as full employees with benefits.
- Uber, DoorDash, Lyft and Amazon could face billions in fines if they mislead over wages, FTC official warns – MarketWatch
- Are gig worker complaints a retail problem? – RetailWire
- Amazon workers in Staten Island, N.Y., file for union election – NBC News
- Can Anyone Stop the Uberization of the Economy? – New York Magazine