Lyft has agreed to tell its drivers how much they can truly earn on the ride-hailing platform and back it up with evidence as part of its settlement for a lawsuit filed by the US Justice Department and the Federal Trade Commission. The lawsuit accused the company of making false and misleading claims in advertisements released in 2021 and 2022, promising drivers up to $43 an hour without disclosing that those numbers were based on top drivers’ earnings. The rates published allegedly inflated actual earnings by up to 30 percent and failed to disclose that they included passengers’ tips. Additionally, Lyft promised set earnings if drivers completed a certain number of rides within a specific timeframe but didn’t clarify that drivers would only be paid the difference between their earnings and the guaranteed amounts. The FTC accused Lyft of continuing to make deceptive claims even after being notified in October 2021. The company recently launched an earnings dashboard showing estimated hourly rates and earnings, but under the settlement, Lyft must explicitly inform drivers of their potential take-home pay based on typical earnings, remove tips from the equation, clarify payment differences, and pay a $2.1 million civil penalty.
