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 “numerous false and misleading claims” in the advertisements it released in 2021 and 2022, when the demand for rides recovered following COVID-19 lockdowns in the previous years. Lyft promised drivers up to $43 an hour in some locations, without revealing that those numbers were based on the earnings of its top drivers. The rates it published allegedly didn’t represent drivers’ average earnings and inflated actual earnings by up to 30 percent, failing to disclose that information and the fact that the amounts published included passengers’ tips. In addition, the company promised drivers set amounts if they completed a certain number of rides within specific timeframes. However, drivers only receive the difference between what they earn and the promised guaranteed earnings. The FTC accused Lyft of making “deceptive earnings claims” even after being notified of concerns in October 2021. Recently, Lyft launched an earnings dashboard showing estimated hourly rates for each ride and drivers’ daily, weekly, and yearly earnings. As part of the settlement, Lyft must explicitly disclose drivers’ potential take-home pay based on typical earnings, exclude tips, clarify that it will only pay the difference between ride earnings and guaranteed promises, and pay a $2.1 million civil penalty.
