Lyft agrees to $25 million settlement with shareholders over security allegations
“Inaccuracies and omissions” ahead of its IPO include failure to disclose the “existential risk” presented by reports of drivers assaulting passengers on the platform, as well as security concerns over its bike-sharing business.
The preliminary settlement agreement, detailed in a filing Thursday, is pending approval by Judge Haywood S. Gilliam, Jr. of the Northern District of California. Notably, the money would go to shareholders, not directly to people who were victimized and reported such incidents.
Shareholders also took issue with Lyft’s claims about market share growth ahead of its IPO.
“Lyft has cultivated a brand image as a safer and more socially responsible ridesharing alternative, with a focus on appealing to female riders,” Thursday’s filing said. “After the IPO, however, dozens of reports surfaced that Lyft drivers had sexually assaulted their passengers. Dozens of individuals filed complaints against Lyft for sexual misconduct by drivers in the months following the Initial Public Offering.”
Shareholders say Lyft did not disclose this in its IPO listing documents.