On Friday, October 25, Lyft reached a $2.1 million settlement with the Federal Trade Commission (FTC) after the agency determined the ride share company had made “deceptive earnings claims about how much money drivers could expect to make per hour and how much they could earn in special incentives.”
“It is illegal to lure workers with misleading claims about how much they will earn on the job,” FTC Chairperson Lina M. Khan said.
“The FTC will keep using all its tools to hold businesses accountable when they violate the law and exploit American workers.”
An FTC investigation found Lyft advertised specific hourly wages to potential drivers. However, the commission found that the advertised hourly wages often did not reflect the average amount that drivers could make, but rather reflected “the earnings of the top one-fifth of drivers.” Furthermore, the complaint explains that the advertised wages included tips from riders, but many drivers assumed that tips would be in addition to the advertised hourly wages.
“This [is] unacceptable and not fair. . . . [Lyft] is misleading their drivers. [Lyft] should pay their driver[s] as stated, it shows I completed the task. As the driver, I expected to be paid for the service I rendered,” one driver told the FTC.
Moving forward, Lyft will not be permitted to include specific hourly wages in their advertisements “unless they have meaningful evidence to back that claim up.”
“In addition, Lyft will be prohibited from making any claims about hourly earnings that include tips as part of the stated hourly amount,” the FTC states.
“The settlement will also require Lyft to clearly disclose to drivers that, under its earnings guarantees, drivers will receive only the difference between their regular earnings and the guaranteed amount. The settlement also requires Lyft to provide notice to its drivers about the settlement.”
