The Division of Justice has introduced that ridesharing app Lyft can pay $2.1 million in civil penalties for deceptive drivers about their potential earnings.
The DOJ and Federal Commerce Fee additionally secured a everlasting injunction “prohibiting such false and deceptive earnings claims.”
In a press release in regards to the settlement, the DOJ mentioned, “In a civil criticism filed within the U.S. District Court docket for the Northern District of California, the federal government alleges that, as early as 2021, Lyft made false and deceptive claims in its promoting and advertising and marketing relating to potential earnings and incentives to be earned by drivers who signed as much as drive for Lyft. Lyft allegedly continued these practices even after it acquired a Discover of Penalty Offenses in October 2021 that positioned the corporate on discover that false and deceptive earnings claims have been illegal.”
The criticism alleged that Lyft marketed hourly quantities that drivers may earn however didn’t disclose that the quantity was based mostly on the highest 20 % of its drivers throughout the US.
“The criticism additionally additional alleges that Lyft additionally tried to induce drivers to supply extra rides by selling ‘earnings ensures,’ which assured that drivers could be paid a set quantity in the event that they accomplished a selected variety of rides in a sure time,” the press launch continued. “These ensures allegedly didn’t clearly disclose that drivers have been paid solely the distinction between what they in any other case earned for the rides and Lyft’s marketed assured quantity, quite than receiving the total assured quantity along with their common earnings for the rides.”
Principal Deputy Assistant Legal professional Common Brian M. Boynton, head of the Justice Division’s Civil Division, mentioned, “The Justice Division will vigorously implement the legislation to cease firms from deceptive People about their potential earnings within the gig financial system. We are going to proceed to work with the FTC to cease unfair and misleading advertising and marketing practices.”
“Lyft drivers deserve correct details about how a lot they are going to be paid for the work they do,” mentioned Director Samuel Levine of the FTC’s Bureau of Client Safety. “Our settlement with Lyft bans exaggerated earnings claims and underscores the FTC’s dedication to making sure gig staff are handled pretty.”
