A Lyft drivers lounge in San Francisco, California, US, on Tuesday, Could 2, 2023.
David Paul Morris | Bloomberg | Getty Pictures
Lyft agreed to pay a $2.1 million civil high-quality to settle U.S. Federal Commerce Fee prices it misled potential drivers about how a lot cash they could earn working for the ride-hailing firm.
A proposed settlement was filed on Friday in San Francisco federal court docket, and requires a choose’s approval.
The case stemmed from commercials that Lyft positioned in 2021 and 2022 to deal with a driver scarcity it referred to internally as a “provide crunch,” as rising entry to Covid-19 vaccines boosted demand for its providers.
Based on the FTC, Lyft deceived drivers about how a lot they might make per hour by that includes hourly earnings based mostly on the highest 20% of drivers, which meant most drivers had been unlikely to earn the marketed pay.
Lyft’s adverts additionally featured “earnings ensures” that misled drivers into believing they’d obtain bonuses, resulting in tens of hundreds of driver complaints, the FTC stated.
“It’s unlawful to lure employees with deceptive claims about how a lot they’ll earn on the job,” FTC Chair Lina Khan stated in a press release.
Rideshare drivers take part in a protest on September 4, 2024 in New York Metropolis.
Stephanie Keith 100584 | Getty Pictures
The settlement additionally requires Lyft to base claims about driver pay on typical earnings, again up these claims with proof, and make the phrases of its earnings ensures clear.
Lyft didn’t admit or deny wrongdoing in agreeing to settle.
In a press release, the San Francisco-based firm stated it was dedicated to obviously speaking earnings prospects to drivers earlier than they enroll, and to following FTC finest practices.
The FTC voted 3-2 in favor of the settlement.
