Uber Technologies’ Board Faces Shareholder Lawsuit Over Alleged Compliance Failures and Sexual Abuse Claims

Uber Technologies’ board has been sued by shareholders over what they describe as “serial” compliance failures, alleging that management and directors allowed the company to cut corners on safety and regulatory obligations, resulting in thousands of lawsuits involving sexual assault and harassment.

The complaint, filed on Monday in a federal court in San Francisco, was brought by shareholders led by a Detroit pension fund. They claim board members ignored repeated internal and external warnings about Uber’s alleged failure to address sexual abuse by its drivers.

Shareholders also argued that weak oversight contributed to two lawsuits brought by the US government last year. One accused Uber of routinely refusing to serve disabled passengers, including those travelling with service animals or stowable wheelchairs. The other alleged deceptive billing and cancellation practices linked to the company’s Uber One subscription service.

The complaint describes Uber as a “serial compliance offender”, claiming its reputation has been “irredeemably damaged” by negative media coverage.

An Uber spokesperson rejected the allegations, saying the lawsuit “ignores important facts and is based on misleading and false narratives from other meritless lawsuits that we have already addressed publicly and in court”.

Lawyers representing the shareholders, led by the Police and Fire Retirement System of the City of Detroit, did not immediately respond to requests for comment.

The derivative lawsuit seeks to compel directors to reimburse Uber for alleged breaches of fiduciary duty and violations of securities laws, with any recovered proceeds benefiting shareholders.

Uber Chief Executive Dara Khosrowshahi is among the defendants. Shareholders claim that although he has been less aggressive in pushing regulatory boundaries than his predecessor during his nearly nine-year tenure, the company has continued to fall short on compliance.

As of June 1, Uber was facing 3,571 lawsuits in litigation being overseen by the San Francisco court, with plaintiffs accusing its drivers of sexual misconduct.

The shareholders also said Uber’s board had been repeatedly informed that fewer than 40 per cent of users believe the company takes safety seriously.

Earlier this month, Uber and rival Lyft filed a lawsuit against New York City to block a new law they say would make it harder to remove dangerous drivers who pose a threat to passenger safety.

Uber’s share price has fallen by more than 25 per cent since reaching its peak on September 22 last year.

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