The U.S. Federal Trade Commission (FTC) announced that Lyft has agreed to pay a $2.1 million fine to settle allegations of misleading driver income claims. The agreement requires Lyft to revise how it advertises driver earnings, addressing the FTC's accusations of false advertising.
The FTC accused Lyft of overstating drivers' hourly income by advertising potential earnings, particularly in Atlanta, as "up to $33 per hour." However, this figure was based on the top 20% of high-earning drivers and included tips, rather than representing average earnings. This practice reportedly inflated most drivers' actual earnings by up to 30%. Moving forward, Lyft is required to base any potential income statements on average earnings and exclude tips from hourly wage calculations.
FTC Chair Lina M. Khan commented on the issue, asserting that misleading workers with inflated income promises is illegal and emphasized that the FTC will continue to take action against companies that violate the law and exploit American workers.
In addition, the FTC took issue with Lyft's so-called "earnings guarantees," such as the promise of $975 for completing 45 rides. The FTC clarified that this was a minimum earnings guarantee rather than an additional bonus, and Lyft must clearly communicate this to drivers.
In response, Lyft stated on its website that it has implemented recent changes to how it informs drivers of potential earnings. The company expressed its commitment to adhering to the FTC's best practices for conveying such information.
