Lyft, Inc.
The FTC alleged that Lyft used misleading hourly earnings and incentive claims to recruit drivers. The Justice Department filed a lawsuit and proposed settlement that included a $2.1 million civil penalty.
Documented. Subject of a regulatory action, lawsuit, or other official proceeding on the public record.
Identity
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- Registrations
- U.S. v. Lyft, Inc. (FTC case 222-3028, 2024)
- Jurisdictions
- United States (federal)
Lawsuit challenges driver earnings claims
The FTC alleged that Lyft used false and misleading advertising about how much drivers could earn. Ads cited potential hourly earnings of up to $33 in Atlanta, $41 in Portland, and up to $43 in Los Angeles. According to the complaint, those figures reflected earnings by the top one-fifth of drivers rather than typical earnings and overstated what most drivers achieved by as much as 30%. The complaint also says the advertised hourly figures included passenger tips, although drivers could assume tips would be added to the stated amount.
The FTC also challenged Lyft’s “earnings guarantees.” One offer said drivers would make $975 after completing 45 rides in a weekend. The agency alleged that Lyft did not clearly disclose that the company would pay only the difference between a driver’s regular earnings and the guaranteed amount. The release says drivers complained in large numbers because they believed the guarantee would be paid as a bonus.
The Justice Department filed the lawsuit and proposed consent decree after referral from the FTC. Under the proposed settlement, Lyft would have to support earnings claims with evidence, exclude tips from stated hourly earnings, clearly explain the terms of earnings guarantees, notify drivers of the settlement, and pay a $2.1 million civil penalty.
What is not established: The supplied documents call the settlement and consent decree proposed. They do not state that a court approved or signed it.
Sources
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- Enforcement action October 25, 2024
- Enforcement action October 25, 2024
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First recorded October 25, 2024 · Last updated October 25, 2024