Lyft plans to implement several safety and governance reforms to resolve a shareholder lawsuit that alleged its executives and directors did not do enough to stop drivers from sexually and physically assaulting passengers.
The tentative settlement was filed Tuesday night in federal court in Oakland, California, and must be approved by a judge.
Lyft agreed to raise awareness among riders about its app’s “Alert 911 Silently” feature for reporting misconduct and make it easier for riders to report issues to a human at any time, and said it has improved its training, business conduct and ethics practices.
The changes will last for at least three years. Officers and directors will not pay any money to the company and its insurers will pay $700,000 in plaintiffs’ legal costs.
Shareholders argued that inadequate training and background checks for drivers, including those with histories of sexual misconduct, have tarnished Lyft’s reputation.
The lawsuit also alleges that Lyft concealed shortfalls before its initial public offering in March 2019 and also concealed defects in electric bicycles that caused numerous injuries.
Lyft officials have denied any wrongdoing in agreeing to the settlement.
The San Francisco-based company said in a statement that the settlement was made “solely to avoid the confusion and expense of litigation.”
Lyft said the lawsuit was the last shareholder lawsuit stemming from its IPO. Through Tuesday, Lyft’s stock price had fallen 83% since its IPO. On Wednesday, Lyft’s stock price was down 4%.
Many ride-share passengers have also accused Uber drivers of sexual assault.
More than 300 lawsuits alleging such practices against Uber have been consolidated into a federal class action lawsuit in San Francisco that could have thousands of plaintiffs.
The case is In re Lyft Inc Derivative Litigation, U.S. District Court, Northern District of California, Case No. 20-09257.
