THE Lyft agreed to a $25 million settlement with shareholders over allegations it failed to adequately disclose threats to its reputation and business before going public.
The “misstatements and omissions” ahead of its initial public offering include the non-disclosure of the “existential risk” posed by reports of drivers assaulting passengers on the platform, as well as safety concerns related to its bike-share business.
The preliminary settlement, detailed in a court filing on Thursday, is pending approval by Judge Haywood S. Gilliam Jr of the Northern District of California. The money would go to shareholders, not directly to the individuals who were victims of and reported such incidents.
“This settlement resolves a shareholder class action related to statements in Lyft’s initial public offering and their financial impact on investors — these are not claims related to security on the platform,” Lyft spokeswoman Gabriela Condarco-Quesada said. , in a statement to CNN .
Shareholders also disagreed with Lyft’s claims regarding its market share growth prior to its IPO.
The securities suit, first filed in 2019 after the company went public, grapples with a disconnect between Lyft’s public image and its handling of sexual assault incidents.
“Lyft has cultivated a brand image as a safer, more socially conscious ride-sharing alternative, with a focus on attracting female passengers,” reads Thursday’s document. “After the IPO, however, several reports surfaced of Lyft drivers sexually assaulting their passengers.”
Shareholders say Lyft did not disclose this in its IPO registration documentation.
Lyft finally released its first safety report in October 2021, in which it revealed that it received 4,158 reports of sexual assault on its platform from 2017 to 2019. The disclosure came more than three years after Lyft and rival Uber committed to publish safety reports publicizing incidents of sexual assault and abuse on its platforms, following a 2018 CNN investigation into the issue.
Lyft said the vast majority of trips (or 99%) had no reported safety incidents in the period included in its report.
Both companies continue to face a series of legal complaints from individuals over their alleged security incidents on their platforms. A small number of claims Lyft is facing are scheduled to go to trial through a coordinated process later this year.
Source: CNN Brasil