The Federal Commerce Fee (FTC) and New York’s lawyer common have accused Handy, the gig app prospects can use to e book cleaners, handymen, and extra, of constructing misleading claims about how a lot staff might earn via its platform.
In a complaint filed on Tuesday within the U.S. District Courtroom for the Southern District of New York, the FTC and the NY lawyer common alleged that Useful, which is owned by Angi (previously Angie’s Checklist), marketed earnings that “don’t replicate the truth for the overwhelming majority of staff on the platform.” Useful additionally failed to obviously disclose charges and fines, the grievance alleged, resulting in thousands and thousands of {dollars} being withheld from staff.
Useful has agreed to settle — however not admit any fault.
“[Handy] relied on inflated and false earnings claims to lure staff onto its platform,” Samuel Levine, director of the FTC’s bureau of client safety, stated in an announcement. “It then deducted inadequately disclosed fines and charges from their wages.”
Based on the grievance, Useful marketed its platform as a strategy to receives a commission for jobs instantly. However its advertisements didn’t point out the truth that staff must pay a payment — and in some instances, full one other job — to unlock the quickest payouts. (By default, it takes round every week to receives a commission for a Useful job.)
Useful additionally set unreasonable expectations about earnings, the FTC and NY lawyer common alleged. In New York, New Jersey, and California, the app’s advertisements touted pay as much as a charge solely accessible to staff in its highest pay tier, which requires assembly difficult-to-reach standards. In different markets, Useful marketed pay for handyman and furnishings meeting jobs as excessive as $45 an hour, even when greater than 90% of staff on the platform made much less, per the grievance.
Furthermore, Useful charged many staff opaque fines, the FTC and NY lawyer common stated — together with fines incurred via no fault of staff. Based on the grievance, a bug in Useful’s system resulted in jobs not being correctly canceled and 1000’s of staff being fined $50. Employees might solely keep away from that superb in the event that they took steps resembling giving GPS permission to Useful’s app and ready greater than half-hour at a job web site.
Charges may be particularly punishing for gig staff like those that depend on Useful as a main supply of earnings. In a 2022 survey by the nonprofit Financial Coverage Institute, 14% of gig staff reported incomes lower than the federal minimal wage. One in 5 stated they’d gone hungry as a result of they couldn’t afford sufficient to eat; practically one-third didn’t pay their whole utility invoice within the month previous to the survey.
Useful itself has admitted that lots of its staff are on public help or dwell in public housing, according to an FTC press launch.
In a settlement proposed by the FTC and NY lawyer common, Useful would pay $2.95 million to refund any staff harmed by the platform’s practices. Useful would additionally must again up claims it makes about how a lot staff can doubtlessly earn and make it clear how staff can keep away from its charges.
In an announcement, Useful stated it has agreed to the phrases.
“Although we have been ready to litigate, we selected to enter into an settlement with these events to place this matter to relaxation and get again to placing our 100% deal with supporting our prospects: the small companies who assist Individuals look after and keep their houses,” a spokesperson informed TechCrunch. “Not one of the companies’ allegations have been honest, and this settlement ought to on no account be construed as a validation of their allegations.”
