There are 2 ways to do this, via the in-game settings, or via editing a game config file. As far as I know, this must only be done by the host.

In the first method, the host can try to increase the Server Bandwidth setting in the general settings, which should somewhat lessen the lag. This setting was still too low for me to have a smooth, stable connection, even with good internet.

In the second method, the host must go to where the .ini config files are located, which should be here:
You might want to enable file name extensions if you didn't already, just google how to do this. In this folder, open the game.ini file and change these two values: TotalNetBandwidth and MaxDynamicBandwidth. They should be on 320000 for TotalNetBandwidth and 160000 for MaxDynamicBandwidth if you set the Server Bandwidth setting to High and half that or a fourth of that if you set it to Normal, or Low. This doesn't matter though since you can now just change these to whatever you want. I found these values to work pretty well: 960000 for TotalNetBandwidth and 480000 for MaxDynamicBandwidth, I haven't tested higher values yet though, so feel free to try higher numbers and let me know the results.

So now these to lines in the game.ini file should look something like this:
Remember, these numbers are only what I used, you can try different numbers if this doesn't work for you!

After this, you need to go back to the folder with the .ini config files in it:Now right click the game.ini file and click on Properties. A window should pop up. Check the checkbox at the bottom of this window that says Read-only.


That's it. The lag should now be reduced significantly and you can enjoy driving bussy with friends.