Uber Technologies’ shareholders have taken legal action against the company’s board, alleging negligence in compliance matters that have resulted in numerous lawsuits related to sexual assault and harassment. The lawsuit, filed in a San Francisco federal court by investors including a Detroit pension fund, claims that the board disregarded warnings regarding Uber’s failure to address sexual abuse by drivers.
The shareholders also pointed out oversight failures that contributed to two federal lawsuits from the previous year. One lawsuit accused Uber of discriminating against disabled passengers, while the other alleged deceptive practices in the Uber One subscription service. The complaint labeled Uber as a “serial compliance offender” with a damaged reputation due to negative media coverage.
A spokesperson for Uber responded, stating that the lawsuit overlooks important facts and is based on misleading narratives from previous meritless lawsuits. The shareholders, represented by the Police and Fire Retirement System of the City of Detroit, have initiated a derivative lawsuit seeking reimbursement for breaches of fiduciary duties and securities law violations, with the proceeds benefiting shareholders.
CEO Dara Khosrowshahi is named as one of the defendants in the lawsuit. Shareholders criticized him for being more cautious in pushing regulatory boundaries than his predecessor but still failing to prioritize compliance. As of June 1, Uber faced 3,571 lawsuits in San Francisco court related to allegations of sexual misconduct by drivers.
The shareholders highlighted that less than 40 percent of users believe Uber takes safety seriously. Additionally, Uber and its competitor Lyft recently filed a lawsuit against New York City to challenge a new law that they claim would hinder their ability to remove unsafe drivers.
Uber’s stock price has dropped by over 25 percent since reaching its peak on September 22 of the previous year.
