The Federal Trade Commission (FTC) has slapped ride-hailing company Lyft with a $2.1 million fine for misleading advertisements about how much drivers could earn. The agency accused Lyft of inflating its advertised earnings claims, which were based on the top fifth of its drivers, rather than the average.

According to the FTC, Lyft's ads claimed drivers could make "specific hourly amounts," such as up to $33 per hour in Atlanta, but failed to disclose that these figures included tips and were not representative of typical earnings. The agency found that these claims overinflated actual earnings by as much as 30%.

As part of the proposed settlement, Lyft must change its advertising practices to ensure that potential earnings claims are based on what drivers typically make, without including tips. The company must also clearly disclose the terms of its earnings guarantees, which were previously misleading.

The FTC's action is part of a broader crackdown on gig economy companies for "unfair, deceptive, anticompetitive and otherwise unlawful practices." The settlement comes as Lyft and rival Uber face increasing labor regulation at the state and municipal level, including minimum wage laws in Massachusetts and New York City.

Lyft has agreed to the settlement and highlighted changes it has made to its advertising practices, stating that it is "committed to following the FTC's best practices" when communicating earnings information to drivers. The company's compliance with the settlement terms will be closely watched by the tech and startup community, which is increasingly scrutinized for its treatment of gig economy workers.