Less than a week after the Federal Communications Commission cited Lyft for violating the Telephone Consumer Protection Act by requiring customers to provide consent to receive automated text messages, the company changed its terms of service.
In the citation, the FCC said it found that Lyft “(1) unlawfully conditioned consumers’ ability to use Lyft’s services on their agreement to receive marketing text messages, and (2) illegally circumvented the FCC’s disclosure requirements for prior express written consent.”
Lyft requires users to agree to its terms of service prior to entering their personal information. Section 6 of the TOS reads: “By becoming a User, you expressly consent and agree to accept and receive communications from us, including via e-mail, text message, calls, and push notifications to the cellular telephone number you provided to us. By consenting to being contacted by Lyft, you understand and agree that you may receive communications generated by automatic telephone dialing systems and/or which will deliver prerecorded messages sent by or on behalf of Lyft, its affiliated companies and/or Drivers, including but not limited to … communications concerning promotions run by us or our third-party partners.”
The Section further stated that “You acknowledge that you are not required to consent to receive promotional messages as a condition of using the Lyft Platform or the Services. However, you acknowledge that opting out of receiving text messages or other communications may impact your use of the Lyft Platform or the Services.”
During the course of its investigation, the FCC staff found that Lyft did not provide unsubscribe options for consumers and that even after searching for instructions on how to opt out of texts, no instructions could be found.
“FCC staff also discovered that when they followed the opt-out instructions, they were no longer able to receive security confirmation text messages needed to log in to their Lyft accounts,” the agency said in its citation. “In other words, exercising the option to decline marketing messages made it impossible to use Lyft’s services. Accordingly, the evidence shows that Lyft’s opt-out representations are illusory in nature, and Lyft effectively requires all consumers to agree to receive marketing text messages and calls on their mobile phones in order to use services.”
The FCC’s TCPA regulations make it unlawful to require a consumer to consent to receive autodialed or prerecorded telemarketing or advertising calls or texts as a condition of purchasing any property, good, or service. Therefore, the agency said Lyft’s TOS violated the regs, as the company failed to obtain prior express written consent as mandated.
Giving Lyft 30 days to respond to the citation, the FCC cautioned that future violations could result in monetary forfeitures of $16,000 per violation and up to $112,500 for a single act or failure to act.
Lyft responded within the time period, changing the TOS within one week. The company dropped the consent requirement, added instructions for users on how to unsubscribe from marketing text messages and still receive other communications from the company, and provided a new answer in the company’s FAQs page about how to opt out of receiving messages.
In a statement, the company said the changes were a move “to be as transparent as possible with consumers,” adding that Lyft “has not been using promotional texts to spam users with unwanted communications.”
To read the FCC’s citation in In the Matter of Lyft, Inc., click here.
Why it matters: The citations (a similar order was directed at First National Bank based on its requirement that users receive text messages in order to participate in online banking or Apple Pay) are just the latest example of the FCC’s recent efforts with regard to TCPA enforcement, after issuing its game-changing Declaratory Ruling and Order this summer. One Commissioner decried the Lyft citation as misguided and “just the first of many harmful real-life effects of the Commission’s march to drastically expand the scope of the TCPA.” “Today’s enforcement bureau action showcases once again the commission’s complete cluelessness when it comes to the tech economy, missing the point about how these free, popular, and entirely optional services actually work,” wrote FCC Commissioner Michael O’Rielly in a dissenting statement. “The bureau is targeting two innovators who are putting power in consumers’ hands to pay for their groceries or locate a safe ride directly from their mobile phones, for communicating with their customers on mobile phones.”