Summary
- Board accused of ignoring warnings about driver abuse, treatment of disabled passengers.
- Lawsuit seeks reimbursement from directors for alleged fiduciary breaches
- Uber faced 3,571 lawsuits over alleged driver misconduct
- Uber says lawsuit is based on misleading and false narratives
(Reuters) – Uber Technologies’ board was sued on Monday by shareholders who accused management and directors of letting the ride-sharing company cut corners on compliance, leading to thousands of lawsuits from victims of sexual assault and harassment.
In a complaint filed in San Francisco federal court, shareholders led by a Detroit pension fund said board members ignored repeated internal and external warnings about Uber’s alleged failure to address sexual abuse by drivers.
Shareholders said oversight failures were also a factor in two lawsuits last year by the federal government.
One accused Uber of routinely refusing to serve disabled passengers, including people with service animals or stowable wheelchairs. The other alleged deceptive billing and cancellation practices in the Uber One subscription service.
“Uber is a serial compliance offender,” whose reputation has been “irredeemably damaged” by negative media coverage, the complaint said.
A spokesperson for San Francisco-based Uber said the lawsuit “ignores important facts and is based on misleading, false narratives from other meritless lawsuits that we have already addressed publicly and in the courtroom.”
Lawyers for the shareholders, led by the Police and Fire Retirement System of the City of Detroit, did not immediately respond to requests for comment.
Monday’s so-called derivative lawsuit seeks to require directors to reimburse Uber for their alleged breaches of fiduciary duties and securities law violations, with proceeds benefiting shareholders.
CEO AMONG DEFENDANTS
Chief Executive Dara Khosrowshahi is among the defendants.
Shareholders said he has in nearly nine years as chief executive been “less brazen in pushing regulatory limits” than his predecessor, but continued to skimp on compliance.
As of June 1, Uber faced 3,571 lawsuits in litigation overseen in the San Francisco court accusing drivers of sexual misconduct.
Shareholders said Uber’s board has been told repeatedly that fewer than 40% of users believe the company takes safety seriously.
Earlier this month, Uber and rival Lyft sued New York City to block a new law they said would prevent them from getting rid of bad drivers who threaten passenger safety.
Uber’s share price has fallen by more than 25% since peaking last September 22.
Reporting by Jonathan Stempel in New York; Editing by Bill Berkrot and Matthew Lewis
