On September 11, 2015, the Federal Communications Commission (“FCC”) issued a Citation and Order (the “Citation”), alleging that the ride-hailing company Lyft, Inc. (“Lyft”) is violating the Telephone Consumer Protection Act (“TCPA”) by requiring users to consent to receive commercial text messages and calls to their cell phones as a condition of using its services. The Citation provides Lyft with 30 days to review its policies and respond. Almost immediately upon receiving the Citation, a Lyft spokesperson issued a statement that “Lyft has not been using promotional texts to spam users with unwanted communications.” Notwithstanding the foregoing, over the weekend, Lyft amended its Terms of Service in an attempt to comply with the FCC’s interpretation of the TCPA.
How might Lyft’s Terms of Service Violate the TCPA?
FCC Accuses Lyft of TCPA Violations
According to the Citation, Lyft’s Terms of Service, in pertinent part, provide:
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 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 . . . . IF YOU WISH TO OPT-OUT OF PROMOTIONAL EMAILS, TEXT MESSAGES, OR OTHER COMMUNICATIONS, YOU MAY OPT-OUT BY FOLLOWING THE UNSUBSCRIBE OPTIONS PROVIDED TO YOU. . . . You acknowledge that you are not required to consent to receive promotional messages as a condition of using the Lyft Platform or the Services.
According to the Citation, Lyft’s Terms of Service violate the TCPA because “it is unlawful to require a consumer to consent to receive autodialed or prerecorded telemarketing or advertising calls/texts as a condition of purchasing any property, good, or service.” Moreover, the FCC termed Lyft’s disclaimer that consumers are not required to consent to receive promotional messages and its opt-out feature “illusory in nature.” According to the Citation, “exercising the option to decline marketing messages made it impossible to use Lyft’s services.”
In response to the Citation, Lyft amended its Terms of Service so that they now state: “You may opt-out of receiving promotional or marketing texts or calls from Lyft at any time by texting the word END to 46080 from the mobile device receiving the messages.” Lyft also provided more detailed opt-out guidelines on their FAQ page. Nevertheless, in announcing these changes, Lyft pointed to FCC Commissioner Michael O’Reilly’s statement last week criticizing the FCC for targeting Lyft, stating that the Citation highlights the FCC’s “complete cluelessness when it comes to the tech economy.”
We recently blogged about similar warnings issued by the FCC and New York State Attorney General to PayPal, Inc. Pursuant to TCPA regulations, a consumer cannot be required to consent to receive telemarketing communications as a condition of service. We will monitor this action for further developments.