Federal Trade Commission Slaps $2.1 Million Fine on Ride-Hailing Company, Lyft, for Luring Drivers
The Federal Trade Commission (FTC) has sued rideshare company, Lyft, for making misleading earnings promises regarding how much drivers might expect to earn each hour and in special incentives.
Following the FTC’s notification and referral, the United States Department of Justice filed the lawsuit and proposed settlement.
Lyft has agreed to a $2.1 million settlement proposed by the FTC for the car-hailing company’s “deceptive earnings claims about how much money drivers could expect to make.”
The lawsuit accused the firm of making “numerous false and misleading claims” in advertisements produced in 2021 and 2022 when demand for rides had recovered after prior COVID-19 lockdowns.
According to the FTC, Lyft promised drivers up to $43 per hour in some regions but did not disclose that those figures were based on the earnings of its top drivers.
“Lyft claimed that Drivers in New Jersey could earn up to $34 per hour when Lyft’s own calculations put the median earnings at only $25 per hour.
“In the same month, Lyft claimed that Drivers in Boston could earn up to $42 per hour when median earnings were just $33 per hour,” the FTC wrote in the complaint.
Lyft allegedly failed to disclose that it will only reimburse the difference between what drivers earn and the stated guaranteed earnings.
Drivers believed they were receiving guaranteed payments on top of their ride fees as a bonus for completing a certain number of rides.
The FTC accused Lyft of continuing to make “deceptive earnings claims” even after it notified the firm of its concerns in October 2021.
We earlier reported that the FTC has issued a pressing alert about a rising trend in cryptocurrency-based romance scams.
These scams involve fraudsters building relationships with their victims online, only to later deceive them into investing in fraudulent crypto schemes.
