Lyft pays $2.1 million to settle case alleging the ride-hailing service deceived drivers

Lyft is paying $2.1 cardinal to settee a suit accusing nan ride-hailing work of exaggerating really overmuch money drivers could make while nan institution was trying to retrieve from a steep downturn successful request during nan pandemic

SAN FRANCISCO -- Lyft is paying $2.1 cardinal to settee a suit accusing nan ride-hailing work of exaggerating really overmuch money drivers could make while nan institution was trying to retrieve from a steep downturn successful request during nan pandemic.

The statement resolves a lawsuit revenge by nan U.S. Justice Department a week agone successful San Francisco national tribunal connected Oct. 25 — nan aforesaid time that Lyft disclosed it had negotiated nan position of nan colony revolving astir nan aforesaid issues pinch nan Federal Trade Commission.

U.S. Magistrate Judge Peter Kang signed an bid formalizing nan colony Thursday earlier it was made publically disposable Friday. Besides having to salary $2.1 million, Lyft besides has been prohibited from engaging successful nan misleading practices flagged successful nan case.

Both nan Justice Department and Federal Trade Commission person been investigating Lyft since uncovering grounds that it was advertizing inflated compensation rates while trying to to enlistee much drivers arsenic nan pandemic began to easiness and ride-hailing request perked up.

The suit alleged Lyft exaggerated nan amounts that its drivers could make successful a assortment of awesome U.S. cities from April 2021 done June 2022. Lyft advertised drivers could make much than $40 per hr successful cities specified arsenic San Francisco, Los Angeles and Boston and much than $30 per hr successful cities specified arsenic Atlanta, Dallas and Miami.

But those figures were based connected nan net among nan apical 20% of Lyft's drivers, leaving them unattainable for astir others who picked up passengers for nan ride-hailing service, nan suit alleged. overmuch arsenic $44 per hr successful San Francisco.

“The Justice Department will vigorously enforce nan rule to extremity companies from misleading Americans astir their imaginable net successful nan gig economy,” Principal Deputy Assistant Attorney General Brian M. Boynton said successful a Friday statement.

Lyft has already changed galore of nan practices cited successful nan suit and is now overseen by a CEO, David Risher, who came connected committee past year.

“We agreed to this colony because we admit nan value of transparency successful maintaining spot successful nan communities we serve,” Lyft said past week erstwhile it first disclosed nan statement pinch nan Federal Trade Commission.