Lyft agrees to a $2 million settlement for falsely advertising to drivers and inflating its pay structure
Many people worldwide rely on Uber and Lyft drivers. This is because rideshare apps can make life more convenient for people, especially those without cars. However, Lyft was hit with a massive fine for luring drivers by advertising false pay rates. This comes after both Lyft and Uber faced protests from drivers for locking them out of the rideshare apps.
Things aren’t great for Uber or Lyft, but the latter of the two is facing a fine
There has been quite a bit of talk surrounding Uber and Lyft drivers. In particular, some have been locked out of the apps, and there are also complaints of low pay. Now, according to Tech Crunch, Lyft has agreed to a $2.1 million settlement with the Federal Trade Commission. Specifically, this settlement is over claims that the company inflated what drivers would earn as a way to lure them in.
The complaint says that in 2021 and 2022, Lyft advertised high wages to prospective drivers. However, once they began the job, this wasn’t the reality. The complaint uses Los Angeles as an example. The app advertised drivers in the area could earn up to $43 per hour. The complaint says, “The company failed to disclose that these amounts did not represent the income an average driver could expect to earn, but instead were based on the earnings of the top one-fifth of drivers.”
Of course, the amounts for Lyft drivers, similar to how it works with Uber, were inflated in other parts of the country. The FTC also says, “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, the company claimed that Drivers in Boston could earn up to $42 per hour when median earnings were just $33 per hour.”
Readers should also note that the company included tips in the wages it said drivers would receive. Additionally, the company seems to have misled drivers about promotions and incentives. Readers should also know that some FTC Commissioners dissented because of Lyft’s use of the words “earn up to” in its marketing material.
For more reading, check out our recent New York Uber and Lyft protests article.
