Lyft agrees to pay $2.1 million penalty after FTC says company made ‘deceptive’ claims about how much drivers can earn

The complaint said the FTC sent a letter to Lyft in 2021 warning the company that it could be liable for civil penalties.

“Lyft continued to make deceptive earnings claims in its advertisements even after receiving the Notice,” the complaint said.

The company agreed to a proposed settlement the same day, saying that it neither admitted nor denied any of the US government’s claims.

When asked for a comment, a Lyft representative directed Business Insider toward a statement on the company’s website.

“After productive discussions, we have agreed to pay the FTC $2.1 million USD to resolve their concerns. We agreed to this settlement because we recognize the importance of transparency in maintaining trust in the communities we serve,” the statement said.

The statement referenced transparency initiatives launched by Lyft, including “upfront pay” introduced in October 2022 and distributing a new earnings summary in February “so drivers can see a breakdown of where every cent of the rider fare goes.”

The settlement requires Lyft to pay a $2.1 million civil penalty.

“In addition to requiring the company to pay a $2.1 million civil penalty, the proposed settlement also will prohibit Lyft from making any earnings claim unless they have meaningful evidence to back that claim up,” the FTC said in a press release. “In addition, Lyft will be prohibited from making any claims about hourly earnings that include tips as part of the stated hourly amount.”

The settlement said Lyft must also disclose to drivers that — under its earnings guarantees — they will receive only the difference between their regular earnings and the guaranteed amount.

It also requires Lyft to notify drivers of the settlement.