The Federal Trade Commission (FTC) and the New York State Attorney General's Office allege that Handy, a gig app that allows customers to book jobs such as cleaners and handymen, made false claims about how much workers could earn through its platform. accused of doing so.
In a complaint filed Tuesday in the U.S. District Court for the Southern District of New York, the FTC and New York State Attorney General allege that Handy, owned by Angie (formerly Angie's List), advertised earnings that “did not reflect profits.” did. This is the reality for the overwhelming majority of workers on the platform. ” According to the complaint, Handy also did not clearly disclose fees and penalties, which resulted in millions of dollars being collected from employees.
Handy agreed to the settlement but did not admit any fault.
“[Handy] FTC Consumer Protection Director Samuel Levine said in a statement that the companies relied on inflated and false revenue claims to lure workers to their platforms. “We then deducted the improperly disclosed fines and fees from their wages.”
According to the complaint, Handy promoted its platform as a quick way to get paid for work. However, the advertisement does not mention the fact that in order to get the fastest payout, workers must pay a fee and, in some cases, complete another job. (By default, Handy job payments take approximately one week to be paid.)
Handy also set unreasonable expectations regarding earnings, the FTC and New York attorney general argued. In New York, New Jersey, and California, apps advertised that they would pay up to wages available only to workers in the highest wage brackets, which requires meeting hard-to-reach standards. According to the complaint, Handy advertised handyman and furniture assembly jobs that cost as much as $45 an hour, even though more than 90% of workers on the platform earn less than that in other markets. was.
In addition, Handy imposed opaque fines on many workers, the FTC and New York State Attorney General said. This includes fines imposed even when the worker is not at fault. A bug in Handy's system prevented jobs from being canceled properly, resulting in thousands of employees being fined $50, according to the complaint. Workers can only avoid this fine if they take steps such as giving GPS permission to Handy's app or waiting at least 30 minutes on-site.
The fees can be especially burdensome for gig workers who rely on Handy as their main source of income. A 2022 study by the nonprofit Economic Policy Institute found that 14% of gig workers reported making less than the federal minimum wage. One in five people said they went hungry because they couldn't afford to eat enough. Almost one-third had not paid their utility bill in full in the month prior to the survey.
According to an FTC press release, Handy itself acknowledged that many of its employees are on welfare or live in public housing.
Under the proposed settlement by the FTC and New York State Attorney General, Handy would pay $2.95 million to repay workers harmed by the platform's practices. Handy will also need to back up its claims about how much workers could potentially earn and clarify how workers can avoid fees.
Handy said in a statement that it had agreed to the terms.
“While we were prepared to file a lawsuit, we have reached an agreement with these parties to close this matter and return to focusing 100% on supporting our customers, the small businesses that help Americans care for and maintain their homes. '' a spokesperson told TechCrunch. “None of the agencies' claims are fair, and this settlement should in no way be construed as vindicating their claims.”