The Federal Trade Commission (FTC) has taken legal action against rideshare company Lyft, alleging that the company made misleading claims about potential driver earnings. According to the complaint, Lyft's advertisements in 2021 and 2022 misrepresented hourly pay by showing inflated figures—such as $43 per hour in Los Angeles—that only reflected earnings of the top 20% of drivers and included customer tips, which many drivers assumed would be extra. Additionally, Lyft’s “earnings guarantees” promised set earnings for a specific number of rides, yet failed to clarify that drivers would only receive the difference between actual earnings and the guaranteed amount, prompting driver complaints.
Lyft agreed to a proposed settlement requiring the company to base future pay claims on typical driver earnings and to disclose the terms of earnings guarantees more transparently. Lyft will pay a $2.1 million civil penalty, and the settlement also prohibits it from including tips in hourly pay calculations. This action is part of the FTC’s wider effort to protect gig economy workers, following similar cases against Amazon, HomeAdvisor, and other companies. The U.S. Department of Justice filed the lawsuit and proposed a consent decree after the FTC’s referral, with the consent decree expected to have legal force upon court approval.
