Uber Technologies is facing a lawsuit from shareholders alleging mismanagement and negligence by the board in overseeing compliance issues, resulting in numerous lawsuits related to sexual assault and harassment. The lawsuit, filed in a San Francisco federal court by shareholders led by a Detroit pension fund, claims that the board disregarded warnings regarding Uber’s failure to address sexual abuse by drivers.
Shareholders also point out oversight failures that contributed to two federal lawsuits against Uber last year. One lawsuit accused Uber of discriminatory practices against disabled passengers, while the other alleged deceptive billing practices in the Uber One subscription service. The complaint describes Uber as a “serial compliance offender” whose reputation has been severely damaged by negative media coverage.
In response to the lawsuit, a spokesperson for Uber stated that the allegations are based on misleading narratives from previous lawsuits that have been addressed publicly and in court. The lawyers representing the shareholders, including the Police and Fire Retirement System of the City of Detroit, have not commented on the lawsuit.
The derivative lawsuit seeks to hold directors accountable for breaches of fiduciary duties and securities law violations, with any recoveries benefiting shareholders. CEO Dara Khosrowshahi is named as a defendant, with shareholders criticizing his approach to compliance during his tenure. Uber is currently facing over 3,500 lawsuits related to sexual misconduct allegations, and shareholders highlight concerns about the company’s safety protocols.
Recently, Uber and Lyft filed a lawsuit against New York City to challenge a new law that they argue would hinder their ability to remove drivers posing safety risks. Uber’s stock price has declined by more than 25% since reaching a peak in September last year.