Uber board sued over alleged ‘serial’ compliance failures, sexual abuse lawsuits

UBER Technologies’ board was sued on Monday (Jun 23) by shareholders who accused management and directors of letting the ride-sharing company cut corners on compliance, leading to thousands of lawsuits from victims of sexual assault and harassment.

In a complaint filed in San Francisco federal court, shareholders led by a Detroit pension fund said board members ignored repeated internal and external warnings about Uber’s alleged failure to address sexual abuse by drivers.

Shareholders said oversight failures were also a factor in lawsuits filed last year by the federal government, which accused Uber of routinely refusing to serve disabled passengers, including people with service animals or stowable wheelchairs, and engaging in deceptive billing and cancellation practices.

“Uber is a serial compliance offender,” whose reputation has been “irredeemably damaged” by negative media coverage, the complaint said.

The San Francisco-based company did not immediately respond to requests for comment. Lawyers for shareholders led by the Police and Fire Retirement System of the City of Detroit did not immediately respond to requests for comment.

Monday’s so-called derivative lawsuit seeks to require directors to reimburse Uber for their alleged breaches of fiduciary duties and violations of federal securities law.

Chief Executive Dara Khosrowshahi is among the defendants.

Shareholders said he has in nearly nine years as chief executive been “less brazen in pushing regulatory limits” than his predecessor, but continued to skimp on compliance.

As of June 1, ​Uber faced 3,571 lawsuits in litigation overseen in the San Francisco court accusing drivers of sexual misconduct.

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Shareholders said Uber’s board has been told repeatedly that fewer than 40 per cent of users believe the company takes safety seriously.

Earlier this month, Uber and rival Lyft sued New York City to block a new law they said would prevent them from getting rid of bad drivers who threaten passenger safety.

Uber’s share price has fallen by more than 25 per cent since peaking last Sep 22. REUTERS