In a significant move, Lyft has agreed to pay a $2.1 million civil fine to settle charges from the U.S. Federal Trade Commission (FTC), which accused the ride-hailing giant of misleading prospective drivers about their earning potential.
The proposed settlement, filed in federal court in San Francisco, is now awaiting a judge’s approval. The case arose from advertisements Lyft ran in 2021 and 2022 during what the company called a “supply crunch,” a time when demand for rides surged as COVID-19 vaccinations became more widely available.
The FTC claims that Lyft’s ads portrayed inflated hourly earnings based on the top 20% of drivers, which misled many prospective drivers into thinking they could achieve similar earnings. The agency also noted that Lyft’s promotions included “earnings guarantees” that created the false impression that drivers would automatically receive bonuses. This led to a flood of complaints from drivers, with tens of thousands voicing their frustrations.
FTC Chair Lina Khan stated, “It is illegal to lure workers with misleading claims about how much they will earn on the job,” emphasizing the importance of transparency in gig economy earnings.
As part of the settlement, Lyft must ensure that any claims about driver pay are based on typical earnings and supported by evidence. Additionally, the company is required to clarify the terms of its earnings guarantees to avoid future misunderstandings.
While Lyft did not admit or deny wrongdoing, the San Francisco-based company expressed its commitment to transparently communicating earnings prospects to drivers before they sign up, aligning with FTC best practices.
The FTC approved the settlement with a narrow 3-2 vote, signaling the agency’s ongoing efforts to protect workers from misleading advertising practices in the gig economy.
As Lyft navigates this legal landscape, drivers and potential applicants will be watching closely to see how these changes impact their earning opportunities in the future.

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