Lyft is under fire again—this time for deceiving its own drivers. The ride-hailing giant has agreed to pay a hefty $2.1 million to resolve charges from the Federal Trade Commission over inflated earnings claims.
At a glance:
- Lyft misled drivers with advertisements in 2021 and 2022, exaggerating hourly earnings based on only the top 20% of drivers.
- The FTC received complaints about false “earnings guarantees,” which promised bonuses that most drivers never received.
- The settlement mandates that Lyft provide accurate pay information and clear terms for any future earnings guarantees.
In a settlement proposed on Friday, October 25, 2024, Lyft agreed to pay $2.1 million to address the Federal Trade Commission’s (FTC) claims of deceptive marketing. This decision is pending approval from a federal judge in San Francisco.
The charges stem from ads Lyft ran in 2021 and 2022 during a period the company described internally as a “supply crunch.” With the rising availability of COVID-19 vaccines, demand for rides surged, prompting Lyft to attract new drivers. However, the FTC found that the ads featured hourly earnings based on the top 20% of drivers, creating a false impression of potential pay. Many drivers, lured by these earnings figures, failed to earn what was advertised.
Additionally, Lyft’s “earnings guarantees” suggested that bonuses were achievable for all, a promise that proved untrue, leading to thousands of driver complaints. FTC Chair Lina Khan emphasized that it’s illegal to attract workers with false earnings claims, adding that companies must be truthful in recruitment practices.
As part of the settlement, Lyft has agreed to future restrictions, requiring any claims about pay to reflect typical driver earnings. The company must also provide evidence to support those figures and clarify the conditions of any “earnings guarantees.”
In its response, Lyft neither admitted nor denied the allegations but affirmed its dedication to transparent communication with drivers, pledging adherence to FTC guidelines.
