The gig economy thrives on the pull of independence. Once you’re working in the gig economy, you decide how much you work and by extension, how much you make. For many, this seems like an easy answer to make a lot of money in a shorter amount of time than they would with a traditional 9-5, and without the structure. However, if some of those companies have violated claims about how much money they make, they would be spreading false information, and this could have severe repercussions.
The Federal Trade Commission said that they’ve sent warnings to about 1,100 companies that if they are misleading people about the earnings they could make with their company, it’s illegal and they could face consequences for those lies.
Companies that come to mind when you hear gig economy were on that list, Lyft, Uber, DoorDash, and even Amazon. Other kinds of companies that received this warning were multilevel marketing companies and others who often claim they can provide another source of income for those who participate. While these warnings do not mean that these companies have done anything wrong, they do need to be aware of what could happen if they do falsify or lie about what people could earn.
Why has this warning come out now? Because the pandemic has had a heavy toll on so many people, they’re searching for anything that could help them make ends meet. If someone is advertised a job where they are in control of their hours and a promise of high wages, then they might take it immediately so they could supplement their current job and continue to bring in income in their off hours. But, if they don’t have accurate information, they could put themselves in further financial trouble.
A single violation could result in a fine of $43,792. When a company advertises to an entire country, this could mean multiple violations of that cost. In the most severe circumstances, companies could face significant fines that reach the billions.
While these warnings do not show wrongdoing, companies that received them have done so in the past. Uber has put high annual earnings for their drivers in advertisements that weren’t true, and Amazon paid the FTC more than $60 million because the company withheld tips from Amazon Flex drivers. These warnings will hopefully keep these companies honest and will hold them accountable when they’re not.
The Rideshare Law Group protects those who have been harmed in accidents involving a rideshare vehicle. We stay up to date with what’s happening in the rideshare world, including news affecting the gig economy. If you’ve been hurt or have any questions, reach out to us.