FTC hits Lyft with $2.1M penalty for luring drivers with false earnings claims

Lyft settles with FTC for $2.1M over misleading driver earnings claims.

: Lyft agrees to a $2.1 million settlement with the FTC for inflating driver earnings in 2021-2022. The company advertised exaggerated hourly rates inclusive of tips, misleading recruits about potential income. Despite being warned by the FTC in 2021, Lyft didn't change its practices. The settlement requires clearer payment promises from Lyft.

Lyft has agreed to pay a $2.1 million settlement proposed by the FTC for misleading drivers with exaggerated earnings claims. The FTC found that Lyft advertised inflated hourly rates in cities like Los Angeles, New Jersey, and Boston that did not reflect actual median earnings.

The FTC's complaint highlighted that Lyft included customer-provided tips in these hourly rates and misrepresented guaranteed promotions. As a result, hundreds of drivers lodged complaints, with particular concern for non-native English speakers misled by the wording.

Despite a prior warning from the FTC in 2021, Lyft continued these practices, leading to the current settlement. Though two FTC Commissioners dissented, the settlement requires Lyft to transparently communicate earnings and promotions, excluding tips in estimated hourly rates.