When COVID vaccines started becoming widely available in early 2021 and demand for ride-hailing services began to recover, Bay Area company Lyft launched a nationwide campaign to recruit drivers with promises of lucrative pay.
“Start driving and earn up to $44/hour,” said an online Lyft ad targeting San Francisco, while another ad focused on Los Angeles touted “up to $43.” Other promotions indicated hourly pay of up to $31 in Miami and Dallas, up to $33 in Atlanta and up to $42 in Boston.
But, according to the U.S. Department of Justice and the Federal Trade Commission, Lyft inflated the potential pay for drivers in such ads, in internet-search responses, and in posts on internet job boards, on Craigslist, and on its website.
Only one out of five drivers made the kind of money Lyft was promising, the agencies said in a lawsuit filed Oct. 25 in San Francisco U.S. District Court.
“Lyft’s deceptive hourly earnings claims were typically preceded with the phrase ‘up to,’ ” the lawsuit says. “Many consumers were unlikely to notice the phrase or understand that it meant that typical driver earnings would be significantly less. The hourly earnings figure was more likely to draw their attention.”
Now the ride-hailing giant has been hit with a $2.1 million fine over the misleading claims.
The company did not respond to requests for comment Tuesday.