Friday
June, 26

“Uber Faces Shareholder Lawsuit Over Compliance Neglect”

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Uber Technologies’ board is facing a lawsuit from shareholders over allegations of neglecting compliance standards, resulting in numerous lawsuits related to sexual assault and harassment. Shareholders, led by a Detroit pension fund, claim that the board disregarded warnings about Uber’s failure to address sexual abuse by drivers. Additionally, the shareholders point out that oversight failures played a role in two federal lawsuits filed against Uber last year.

The complaint emphasizes Uber’s poor compliance record, stating that the company’s reputation has been significantly tarnished by negative media coverage. In response, a spokesperson for Uber refuted the lawsuit’s claims, labeling them as misleading and based on false narratives from previous lawsuits.

The derivative lawsuit filed on Monday aims to hold directors accountable for alleged breaches of fiduciary duties and securities law violations, with any retrieved funds benefiting shareholders. CEO Dara Khosrowshahi is named as one of the defendants in the lawsuit, with shareholders criticizing his approach to regulatory compliance during his tenure.

The legal action comes as Uber faces a substantial number of lawsuits related to sexual misconduct by drivers, with over 3,500 cases currently in litigation. Shareholders also highlighted concerns about user perceptions of safety within the company, indicating that less than 40% of users believe Uber takes safety seriously.

Recently, Uber and Lyft took legal action against New York City to challenge a new law that they argue would hinder their ability to remove drivers posing safety risks. Notably, Uber’s stock price has experienced a significant decline of more than 25% since its peak in September last year.

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