Uber, Amazon and DoorDash are amongst a number of companies facing significant sanctions if they’re found to have violated moneymaking claims, according to the Federal Trade Commission (FTC).
The regulator announced this week that it has warned over 1,100 companies that it is illegal to “deceive or mislead” its consumers about their potential earnings.
It has also said that the sanctions could reach up to billions in fines if found of any wrongdoing.
FTC associate director for marketing practises Lois Greisman told MarketWatch that it is the first time it has sent a notice about this issue to so many companies.
“We did a very broad sweep,” she told MarketWatch.
“Everyone on that list as best as we can tell is a company that talks about how much money people can earn if they become a direct or indirect employee or use a service.”
The FTC’s release said that the companies that received the notices include companies that offer “ubiquitous ‘gigs’ that pitch a steady second income.
It did also add that the notices were a reminder about the laws and do not imply any wrongdoing.
Gig economy workers are employed by delivery companies including the range of grocery delivery startups that have grown in prominence since the start of the pandemic.
They often are attracted after being touted flexible hours and the ability for people to earn money on the side.
“As the pandemic has left many people in dire financial straits, moneymaking pitches have proliferated and gained special attention,” the agency said in the news release.
Each one of the violations could result in a penalty of up to $43,792 according to the agency.
This means that if a company falsely advertised how much a worker can potentially earn, they could be fined billions of dollars, according to Greisman.
Labour experts and gig economy workers often contradict much-higher average wage claims by gig companies.
While Greisman was reluctant to not comment about whether the FTC has begun investigations into any gig companies, she said the industry is “an area of serious concern.”
“There’s probably nothing more salient than for someone who has lost a job who is trying to make ends meet [to know] how much they’re going to make,” she added.