Communicating clearly around driver earnings is key to fulfilling our commitment of being customer obsessed. Lyft has been a leader in developing industry standard practices when it comes to transparency around driver earnings, and is focused on maintaining its position as an industry leader in this area. Lyft has reached a settlement with the Federal Trade Commission (FTC) regarding certain types of driver earnings claims that Lyft made in advertisements during the time period of the investigation (2021-2022). After productive discussions we have agreed to pay the FTC $2.1 million USD to resolve their concerns. We agreed to this settlement because we recognize the importance of transparency in maintaining trust in the communities we serve.
More specifically, the FTC alleged that, between April 2021 and June 2022, Lyft made claims regarding hourly earnings in certain advertisements which the agency said could be misleading. Additionally, the FTC alleged that Lyft failed to adequately explain to drivers how a particular type of earnings guarantee promotion worked. Specifically, the FTC believed that Lyft needed to make it more clear that if driver earnings were below a minimum guaranteed level, then drivers received the difference between those amounts rather than a lump sum on top of their earnings. We agreed to take steps to ensure that what we say about driver earnings in our advertising is clear.
Furthering our ongoing commitment to transparency
We’ve made it our mission to launch transparent products around driver earnings so they know what they can earn before they hit the “accept” button. We’ve doubled down on those efforts to improve the driver experience:
We launched upfront pay in many of our major markets in October 2022 so drivers can see ride and earnings information before accepting a ride. Drivers have access to trip details including the pickup and drop-off locations, estimated time and distance to complete the ride, and a map view of the full ride in addition to the fare. Everything is in one place and drivers no longer have to do the math to see if a trip is worth their time.
In February of this year we set a new standard in driver pay and transparency by being the first and only company to guarantee drivers their share of rider payments. Our Earnings Commitment ensures drivers will earn 70% or more of rider payments each week, after external fees. If a driver is ever under 70% at the end of the week, they’ll be paid the difference between the earnings and the guaranteed amount.
We launched a new earnings summary in February of this year, redesigned with a focus on clarity so drivers can see a breakdown of where every cent of the rider fare goes.
This month, we made it easier for drivers to decide whether to accept a ride request by showing them an estimated $/hour rate for the ride on the accept screen.
And we’re just getting started. At Lyft, we are committed to drivers for the long-term and are focused on helping them understand their potential earnings opportunities before they get behind the wheel. We are also committed to following the FTC’s best practices when it comes to communicating about driver earnings now and in the future.