Lyft has agreed to pay $25 million to settle shareholders’ allegations that it failed to disclose safety issues in its Initial Public Offering (IPO) paperwork. According to Reuters, shareholders accused the company of concealing known problems, such as sexual assaults by its drivers, to cultivate an image of a more socially responsible alternative to Uber. They also accused Lyft of not disclosing safety issues regarding its bikeshare program, specifically the problem the company faced with its brakes that forced it to pull its bikes from various cities in the US. While Lyft has agreed to settle, it denied any wrongdoing. In a statement sent to CNN Business, company spokesperson Gabriela Condarco-Quesada said:
“This settlement resolves a shareholder class action related to statements in Lyft’s initial public offering and its financial impact on investors — it’s not about safety-related claims on the platform.”
In their complaint, the shareholders said reports of sexual assaults by Lyft drivers that came out after the IPO represented an “existential risk” to the brand that should have been disclosed beforehand. Further, they said Lyft used promotions to boost its market share against Uber.
Lyft officially filed to go public in 2019, but it wasn’t until 2021 that it had published its first safety report. In it, the ride—hailing firm revealed that it received a total of 4,158 sexual assault reports from 2017 until 2019. Lyft divided the cases in different categories for its report, with the most common incidents falling under the non-consensual touching of a sexual body part category. It’s worth noting, however, that the money for this settlement will go to shareholders and not to any of the passengers who reported being sexually assaulted by the firm’s drivers.
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