(Reuters) -Lyft ( LYFT ) agreed to pay a $2.1 million civil fine to settle U.S. government charges it misled prospective drivers about how much money they might earn working for the ride-hailing company.
A proposed settlement was filed on Friday in San Francisco federal court, and requires a judge's approval.
The case stemmed from advertisements that Lyft ( LYFT ) began placing in 2021, to address a driver shortage it referred to internally as a "supply crunch" as growing access to COVID-19 vaccines boosted demand for its services.
According to the U.S. Department of Justice, Lyft's ( LYFT ) ads featured hourly earnings based on the top 20% of drivers, which meant most drivers were unlikely to earn the advertised pay.
The Justice Department said Lyft's ( LYFT ) ads also featured "earnings guarantees" that misled drivers into believing they would receive guaranteed amounts as bonuses. Tens of thousands of drivers have complained about these guarantees, it said.
Lyft ( LYFT ) did not admit or deny wrongdoing in agreeing to settle. It did not immediately respond to a request for comment.