United States of America: Reached settlement in FTC and DOJ lawsuit against Lyft over alleged deceptive earnings claims regarding driver compensation

On 25 October 2024, the Department of Justice (DOJ) filed a complaint and proposed a consent decree upon notification and referral from the Federal Trade Commission (FTC) against Lyft. The consent decree includes a fine of USD 2.1 million for alleged deceptive earnings claims regarding driver compensation. The lawsuit relates to misleading advertisements about driver earnings in 2021 and 2022, inflating hourly wages by up to 30%. The FTC claims that Lyft’s earning guarantees misled drivers into thinking they would receive additional bonuses rather than just the difference between their actual pay and the guarantee. The consent decree prohibits unsubstantiated claims about drivers' earnings and restricts any misrepresentations regarding tips and other financial incentives. Furthermore, Lyft is also required to provide clear disclosures about any minimum earnings guarantees offered to drivers. The consent decree also requires Lyft to publish a notice in their application outlining the changes.