(CNN) — Lyft has agreed to a $25 million settlement with shareholders over allegations that it failed to adequately disclose threats to its fame and enterprise forward of going public.
The “misstatements and omissions” earlier than its preliminary public providing embody not disclosing the “existential risk” introduced by studies of drivers assaulting passengers on the platform, in addition to issues of safety regarding its bikeshare enterprise.
The preliminary settlement settlement, detailed in a court docket submitting Thursday, is pending approval by Judge Haywood S. Gilliam, Jr. of the Northern District of California.
Lyft, which continues to deny the allegations in accordance to the submitting, didn’t instantly reply to a request for remark.
The securities go well with, first filed in 2019 after the corporate went public, alleged a disconnect between Lyft’s public picture and its dealing with of sexual assault incidents.
“Lyft cultivated a brand image as a safer, more socially conscious rideshare alternative with a focus on appealing to female passengers,” Thursday’s submitting reads. “After the IPO, however, scores of reports came to light of Lyft drivers sexually assaulting their passengers. Dozens of individuals brought claims against Lyft related to driver sexual misconduct in the months following the IPO.”
The shareholders say Lyft failed to disclose this in its IPO registration paperwork.
Lyft in the end launched its first-ever security report in October 2021 through which it disclosed it acquired 4,158 studies of sexual assault on its platform from 2017 to 2019. The disclosure got here greater than three years after Lyft and its rival Uber dedicated to placing out security studies disclosing incidents of sexual assault and abuse on their platforms after a 2018 CNN investigation into the problem.
Both corporations proceed to face quite a few authorized claims over alleged security incidents on their platforms. A small variety of claims that Lyft is dealing with are slated to go to trial by way of a coordinated continuing later this 12 months.
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