Please ensure Javascript is enabled for purposes of website accessibility
Lyft Pays $2.1 Million to Settle Case Alleging the Ride-Hailing Service Deceived Drivers
gvw_ap_news
By Associated Press
Published 5 hours ago on
November 1, 2024

Lyft settles lawsuit for $2.1 million over allegations of misleading drivers about potential earnings during pandemic recovery. (AP File)

Share

Getting your Trinity Audio player ready...

SAN FRANCISCO — Lyft is paying $2.1 million to settle a lawsuit accusing the ride-hailing service of exaggerating how much money drivers could make while the company was trying to recover from a steep downturn in demand during the pandemic.

The agreement resolves a case filed by the U.S. Justice Department a week ago in San Francisco federal court on Oct. 25 — the same day that Lyft disclosed it had negotiated the terms of the settlement revolving around the same issues with the Federal Trade Commission.

Settlement Formalizes Restrictions on Lyft’s Practices

U.S. Magistrate Judge Peter Kang signed an order formalizing the settlement Thursday before it was made publicly available Friday. Besides having to pay $2.1 million, Lyft also has been prohibited from engaging in the misleading practices flagged in the case.

Both the Justice Department and Federal Trade Commission have been investigating Lyft since uncovering evidence that it was advertising inflated compensation rates while trying to to recruit more drivers as the pandemic began to ease and ride-hailing demand perked up.

Allegations of Exaggerated Earnings Claims

The lawsuit alleged Lyft exaggerated the amounts that its drivers could make in a variety of major U.S. cities from April 2021 through June 2022. Lyft advertised drivers could make more than $40 per hour in cities such as San Francisco, Los Angeles and Boston and more than $30 per hour in cities such as Atlanta, Dallas and Miami.

But those figures were based on the earnings among the top 20% of Lyft’s drivers, leaving them unattainable for most others who picked up passengers for the ride-hailing service, the lawsuit alleged. much as $44 per hour in San Francisco.

Justice Department Emphasizes Enforcement Against Misleading Claims

“The Justice Department will vigorously enforce the law to stop companies from misleading Americans about their potential earnings in the gig economy,” Principal Deputy Assistant Attorney General Brian M. Boynton said in a Friday statement.

Lyft has already changed many of the practices cited in the lawsuit and is now overseen by a CEO, David Risher, who came on board last year.

“We agreed to this settlement because we recognize the importance of transparency in maintaining trust in the communities we serve,” Lyft said last week when it first disclosed the agreement with the Federal Trade Commission.

RELATED TOPICS:

DON'T MISS

Immediate Threat: Mussel Invades California’s Delta, First Time in North America

DON'T MISS

Two-Time Cy Young Winner Blake Snell Opts Out of Contract with Giants

DON'T MISS

No Matter the Outcome, We Are the True Losers of This Election

DON'T MISS

Russia’s Swift March Forward in Ukraine’s East

DON'T MISS

Rapper Young Thug Is a Free Man. Here Are Things to Know About His Plea.

DON'T MISS

AMOR Wellness Trunk-or-Treat Brings 700 Mendota Residents Together for Halloween Fun

DON'T MISS

What Kind of Trouble Is Miguel Arias Trying to Stir Up This Time?

DON'T MISS

MrBeast Probe Ends With Some Employees Fired but Finds No Proof of Sexual Misconduct Allegations

DON'T MISS

Lyft Pays $2.1 Million to Settle Case Alleging the Ride-Hailing Service Deceived Drivers

DON'T MISS

Fresno Man Shot to Death at NW Apartment Complex Is Identified

UP NEXT

Two-Time Cy Young Winner Blake Snell Opts Out of Contract with Giants

UP NEXT

No Matter the Outcome, We Are the True Losers of This Election

UP NEXT

Russia’s Swift March Forward in Ukraine’s East

UP NEXT

Rapper Young Thug Is a Free Man. Here Are Things to Know About His Plea.

UP NEXT

AMOR Wellness Trunk-or-Treat Brings 700 Mendota Residents Together for Halloween Fun

UP NEXT

MrBeast Probe Ends With Some Employees Fired but Finds No Proof of Sexual Misconduct Allegations

UP NEXT

Lyft Pays $2.1 Million to Settle Case Alleging the Ride-Hailing Service Deceived Drivers

UP NEXT

Fresno Man Shot to Death at NW Apartment Complex Is Identified

UP NEXT

Guns, Marijuana, Gambling: Fresno’s Smoke Shop Enforcement Issues $5M in Citations

UP NEXT

North Korea’s Long-Range Missile Test Signals Its Improved, Potential Capability to Attack US

Russia’s Swift March Forward in Ukraine’s East

4 hours ago

Rapper Young Thug Is a Free Man. Here Are Things to Know About His Plea.

4 hours ago

AMOR Wellness Trunk-or-Treat Brings 700 Mendota Residents Together for Halloween Fun

4 hours ago

What Kind of Trouble Is Miguel Arias Trying to Stir Up This Time?

4 hours ago

MrBeast Probe Ends With Some Employees Fired but Finds No Proof of Sexual Misconduct Allegations

5 hours ago

Lyft Pays $2.1 Million to Settle Case Alleging the Ride-Hailing Service Deceived Drivers

5 hours ago

Fresno Man Shot to Death at NW Apartment Complex Is Identified

5 hours ago

Guns, Marijuana, Gambling: Fresno’s Smoke Shop Enforcement Issues $5M in Citations

6 hours ago

North Korea’s Long-Range Missile Test Signals Its Improved, Potential Capability to Attack US

9 hours ago

Pennsylvania Challenge of Elon Musk’s $1M-a-Day Voter Sweepstakes Moves to Federal Court

9 hours ago

Immediate Threat: Mussel Invades California’s Delta, First Time in North America

From the glittery bling of its name, the golden mussel sounds like it could be California’s state bivalve. Alastair Bland CalMatters...

3 hours ago

3 hours ago

Immediate Threat: Mussel Invades California’s Delta, First Time in North America

3 hours ago

Two-Time Cy Young Winner Blake Snell Opts Out of Contract with Giants

4 hours ago

No Matter the Outcome, We Are the True Losers of This Election

A resident outside an apartment complex that was destroyed by Russian bombardment in Siversk, in Ukraine, Oct. 30, 2024. (Tyler Hicks/The New York Times)
4 hours ago

Russia’s Swift March Forward in Ukraine’s East

4 hours ago

Rapper Young Thug Is a Free Man. Here Are Things to Know About His Plea.

4 hours ago

AMOR Wellness Trunk-or-Treat Brings 700 Mendota Residents Together for Halloween Fun

4 hours ago

What Kind of Trouble Is Miguel Arias Trying to Stir Up This Time?

5 hours ago

MrBeast Probe Ends With Some Employees Fired but Finds No Proof of Sexual Misconduct Allegations

Search

Send this to a friend