The Federal Trade Commission (FTC) announced on Friday that Lyft, a rideshare company, has agreed to pay $2.1 million as part of a proposed settlement. This settlement will require Lyft to modify its advertising approach regarding driver pay.
The FTC found that Lyft routinely advertised specific hourly earnings—such as claiming up to $33 per hour for drivers in Atlanta—based not on average earnings but on what the top 20% of drivers made. These figures also reportedly included tips, according to the Commission.
The FTC indicated that such advertising practices inflated the actual earnings for most drivers by as much as 30%. Under the new agreement, Lyft is required to base potential pay claims on what drivers typically earn, excluding tips from the stated hourly wage.
FTC Chair Lina M. Khan stated, “It is illegal to lure workers with misleading claims about how much they will earn on the job. The FTC will continue leveraging its tools to hold businesses accountable when they violate the law and exploit American workers.”
The FTC’s complaint included examples of Lyft’s misleading advertisements, illustrating these points.
Additionally, Lyft promoted certain earnings guarantees, such as promising $975 for completing 45 rides over a weekend. The FTC noted that these offers misled drivers into thinking they would receive this amount in addition to their earnings, whereas it was actually a conditional minimum pay guarantee for completing a certain number of rides. Lyft is now required to clarify this condition in its communications.
In response, Lyft issued a statement on its website highlighting its recent changes to inform drivers about potential earnings and emphasized its commitment to adhering to the FTC’s best practices in its communications.
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