Lyft Is Getting a Slap on the Wrist for Misleading Prop 22 Ads

California's Fair Political Practices Commission is proposing to fine Lyft for failing to properly disclose it paid for advertisements supporting Proposition 22.

The proposed fine of $3,371, however, is merely a slap on the wrist compared to the enormity of what Lyft spent to convince voters to push through the law—and what it gained.

Backed by Uber, Lyft, DoorDash, and other app-based gig companies, the Yes on Prop 22 campaign spent nearly $205 million to pass a carve out they wrote that granted an exemption to California labor laws requiring they stop misclassifying their drivers and couriers as independent contractors. In the final days of the campaign, the Wall Street Journal pegged the campaign’s ad spend at $82 million. Lyft itself spent over $48 million on the campaign. 

Prop 22 was a massive boon to gig companies. Shortly before the November 3 vote that passed Prop 22, Lyft's market value was near an all-time low and hovering around $7 billion. Less than a week after, it gained nearly $5 billion in value. Today, it sits at nearly $17 billion.

According to an FPPC spokesperson, the Commission is fining Lyft because it “failed to include the proper advertisement disclosures on electronic media and text message advertisements.” Lyft is being fined $1,499 for email advertisements that were missing a "paid for by" disclosure, $936 for robocalls and text ads missing or providing an incorrect name, and another $936 for robocall or text ads missing a "paid for by'' disclosure.

The fine was determined under what the FPPC calls a "Streamline" settlement program, which uses different metrics and formulas to determine what violations will end up costing the offending party. The method, as the name suggests, streamlines the process and reduces the resources needed, but it also bypasses the need for the full Commission (a five member, non-partisan appointed body) to vote and approve decisions. 

One of the tradeoffs, however, is that we are not exactly made privy of how the fine amount was arrived at nor does it seem to be a satisfactory sum. This fine, also, does not seem to cover the deceptive Yes on Prop 22 mailers that masqueraded as materials sent by progressive groups and public political figures.

As app-based gig companies ramp up their nationwide campaigns and as resistance mounts against them, it is an open question whether regulators will not only actually take aim at the companies, but if they will have the tools to do so in the first place.