Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 1 of 51
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`Rosanne L. Mah (State Bar No. 242628)
`Email: rmah@zlk.com
`LEVI & KORSINSKY, LLP
`388 Market Street, Suite 1300
`San Francisco, California 94111
`Telephone: (415) 373-1671
`Facsimile: (415) 484-1294
`
`Gregory M. Nespole (pro hac vice forthcoming)
`Email: gnespole@zlk.com
`LEVI & KORSINSKY, LLP
`55 Broadway, 10th Floor
`New York, New York 10006
`Telephone: (212) 363-7500
`Facsimile: (212) 363-7171
`
`Attorneys for Plaintiff Ron Chenoy
`
`
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`UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF CALIFORNIA
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`Case No.
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`VERIFIED STOCKHOLDER
`DERIVATIVE COMPLAINT
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`Plaintiff,
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`Individual Defendants,
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`RON CHENOY, Derivatively on Behalf of LYFT,
`INC.,
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`v.
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`JOHN ZIMMER, LOGAN GREEN, BRIAN
`ROBERTS, PRASHANT (SEAN)
`AGGARWAL, DAVID LAWEE, HIROSHI
`MIKITANI, ANN MIURA-KO, MARY
`AGNES (MAGGIE) WILDEROTTER,
`JONATHAN CHRISTODORO, BEN
`HOROWITZ, and VALERIE JARRETT,
`
`
`-and-
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`LYFT, INC., a Delaware corporation,
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`Nominal Defendant.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 2 of 51
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`Plaintiff Ron Chenoy (“Plaintiff”), by his attorneys, submits this Verified Stockholder
`Derivative Complaint for Violations of Securities Laws, Breach of Fiduciary Duty, Waste of
`Corporate Assets, and Unjust Enrichment. Plaintiff alleges the following upon information and
`belief, except as to the allegations specifically pertaining to Plaintiff which are based on personal
`knowledge. This complaint is also based on the investigation of Plaintiff’s counsel, which
`included, among other things, a review of public filings with the U.S. Securities and Exchange
`Commission (“SEC”) and a review of news reports, press releases, and other publicly available
`sources.
`
`I.
`NATURE AND SUMMARY OF THE ACTION
`1.
`This is a stockholder derivative action brought by Plaintiff on behalf of Nominal
`Defendant Lyft, Inc. (“Lyft” or the “Company”) against members of its board of directors (the
`“Board”) and members of upper management. The wrongdoing alleged herein has caused
`substantial damage to Lyft’s reputation, goodwill, and standing in the business community and has
`exposed Lyft to substantial potential liability for violations of federal securities laws and the costs
`associated with defending itself. The violations of the law outlined herein have damaged Lyft in
`the form of, among other things, millions of dollars in losses to the Company’s market
`capitalization, resulting from exposure to liabilities and reputational damage.
`2.
`This action seeks to remedy wrongdoing committed by Lyft’s directors and officers
`from March 28, 2019 through the present (the “Relevant Period”).
`3.
`Lyft operates a peer-to-peer marketplace for on-demand ridesharing in the United
`States and Canada. The Company offers riders personalized and on-demand access to various
`transportation options. It provides a ridesharing marketplace, which enable drivers to provide their
`transportation services to riders. The Company also offers a network of shared bikes and scooters
`in various cities; Express Drive program, a flexible car rentals program that connects drivers who
`need access to a car with third-party rental car companies; and concierge for organizations to
`manage the transportation needs of their customers and employees.
`4.
`The Company initiated plans to go public in December 2018. When it filed a draft
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 3 of 51
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`registration statement with the SEC. On March 1, 2019, the Company filed its operative
`registration statement on Form S-1 with the SEC (the “Registration Statement”) in connection with
`the planned initial public offering (“IPO”). On that same day, the Company filed with the SEC a
`Prospectus on Form 424B4 (the “Prospectus”) in connection with the IPO. The Prospectus was
`included with the Registration Statement (together with all amendments these documents are
`referred to herein as the “Offering Documents”).
`5.
`The Registration Statement was approved on March 28, 2019, and the Company’s
`stock commenced trading publicly on the Nasdaq Global Select Market on March 29, 2019. As a
`result of the IPO, the Company sold over 32.5 million shares of stock priced at $72 per share and
`garnered approximately $2.34 billion in net proceeds.
`6.
`The Offering Documents outlined Lyft’s culture, values, brand, commitment to
`safety, and dedication to social responsibility, particularly in relation to women. The Offering
`Documents explained Lyft’s growth into other methods of transportation such as its recently-
`acquired bike sharing program. Further, the Offering Documents provided an overstated market
`share and highlighted certain revenue growth attainments. The Offering Documents described Lyft
`as “driver-centric” and listed key benefits that Lyft gave its drivers to provide an overall positive
`driver experience. Lastly, the Offering Documents detailed the risks facing the Company,
`including illegal, improper, or otherwise inappropriate activity of the Company’s proprietary
`network that could be detrimental Lyft’s business. However, these outlined risks did not include a
`huge number of issues with the Company’s rideshare services known to Lyft at that time.
`7.
`During the Relevant Period, the Individual Defendants breached their fiduciary
`duties by personally making and/or causing the Company to make a series of materially false and
`misleading statements regarding the Company’s business, operations, and prospects in its Offering
`Documents, and failing to timely correct those statements. Specifically, the Individual Defendants
`willfully or recklessly made and/or caused the Company to make false and misleading statements
`that failed to disclose, inter alia, that: (1) passengers were physically assaulted, sexually harassed,
`and/or raped by Lyft drivers and reported complaints with the Company about their experiences
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 4 of 51
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`prior to the IPO; (2) it was highly probable that the Company would suffer reputational damage
`and/or legal liability due to the rampant and increasing amount of sexual assaults committed by
`Lyft drivers; (3) the braking system on Lyft’s electronic bikes was defective and riders sustained
`injuries such as scrapes, bruising, broken bones, and damaged limbs; (4) riders who were injured
`as a result of defects in the braking system in Lyft’s electric bikes lodged complaints with the
`Company about their accidents prior to the IPO; (5) safety issues related to the Company’s electric
`bike fleet stifled Lyft’s expansion, diversification, and transformation into a multimodal
`transportation network; (6) labor disputes with Lyft’s drivers, resulting from the Company’s policy
`changes leading up to the IPO, threatened to disrupt Lyft’s workforce and significantly impact its
`business; (7) the Company had suffered a colossal first quarter net loss totaling over $1.1 billion,
`more than double the net loss the Company recognized the fiscal year prior; (8) the Company
`planned to abandon key revenue growth metrics that the Company touted in its Offering
`Documents as important measurements of Lyft’s financial performance and growth; (9) the
`Company’s market share was overstated; and (10) the Company failed to maintain internal
`controls. As a result of the foregoing, the Company’s public statements were materially false and
`misleading at all relevant times.
`8.
`Eventually, even though it was internally known beforehand, the Company
`disclosed weak performance for the first fiscal quarter of 2019. However, the Individual
`Defendants failed to issue statements correcting the misstatements and omissions that were
`contained in the Offering Documents. Further, the Individual Defendants repeated many of the
`false and misleading statements contained in the Offering Documents in subsequent public
`statements distributed after the IPO, including in the Company’s quarterly report for the fiscal
`quarter ended March 31, 2019 (the “1Q19 10-Q”) and in the related earnings press release and
`conference call.
`9.
`From Lyft’s IPO until May 8, 2019 when the above events were unfolding, the price
`per share of the Company’s common stock dropped over 26.5%, or $19.09, from its IPO price of
`$72.00 per share to $52.91 per share.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 5 of 51
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`10.
`After the IPO, the Individual Defendants failed to correct these false and misleading
`statements and omissions of material fact, rendering them personally liable to the Company for
`breaching their fiduciary duties. The Individual Defendants also willfully or recklessly caused the
`Company to fail to maintain an adequate system of oversight, disclosure controls and procedures,
`and internal controls over financial reporting.
`11.
`Additionally, in breach of their fiduciary duties, the Individual Defendants failed to
`maintain internal controls.
`12.
`As detailed herein, and as alleged in the ongoing federal securities class action in
`the Northern District of California styled In Re Lyft Technologies Inc. Securities Litigation, Case
`No. 19-cv-02690-HSG, (the “Federal Securities Class Action”), and a securities class action
`lawsuit pending in the Superior Court of the State of California, County of San Francisco (together
`“the Securities Class Actions”), Lyft’s officers and directors substantially damaged the Company
`by filing false and misleading statements that omitted material adverse facts.
`13.
`Specifically, on September 8, 2020, the District Court in the Federal Securities
`Class Action issued an order granting in part and denying in part defendants’ motion to dismiss.
`See Dkt. No. 78. The District Court found that the complaint adequately at the motion to dismiss
`stage that the Registration Statement’s omission of any mention of potential liability from sexual
`assaults perpetrated by drivers against riders rendered the Company’s statements touting safety
`materially misleading. Moreover, the complaint adequately alleged that the Registration Statement
`failed to warn of reputational risk stemming from the sexual assault allegations and litigation and
`that such reputational risk had already materialized by the time of the Company’s IPO. The
`complaint also sufficiently alleged that the bikeshare program’s risk factors were insufficient for
`the purposes of the motion to dismiss because many of the problems and safety issues arising from
`the bikes had already occurred there constituting present realities not contingencies.
`II.
`JURISDICTION AND VENUE
`14.
`This Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 because
`Plaintiff’s claims raise a federal question under question under Section 11(f) of the Securities Act,
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 6 of 51
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`15 U.S.C. § 77k (f)(1), and Section 21D of the Exchange Act, 15 U.S.C. § 78u-4(f).
`15.
` This Court has supplemental jurisdiction over Plaintiff’s state law claims pursuant
`to 28 U.S.C. § 1367(a).
`16.
`This derivative action is not a collusive action to confer jurisdiction on a court of
`the United States that it would not otherwise have such jurisdiction.
`17.
`This Court has personal jurisdiction nominal defendant Lyft, because it is a
`corporation conducting substantial business in this District. This Court has personal jurisdiction
`over each of the Individual Defendants because he or she is an individual who has minimum
`contacts with this District to justify the exercise of jurisdiction over them.
`18.
`Venue is proper in this District pursuant to 28 U.S.C. §§ 1391 and 1401 because
`Lyft is incorporated in this District.
`III. THE PARTIES
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`
`
`Plaintiff
`19.
`Plaintiff Ron Chenoy is and has continuously been a stockholder of Lyft during the
`wrongdoing complained of herein.
`Nominal Defendant
`
`20.
`Defendant Lyft is a Delaware corporation with its principal executive offices
`located at 185 Berry Street, Suite 5000, San Francisco, California 94107. The Company’s shares
`trade under the ticker symbol “LYFT.”
`Individual Defendants
`
`21.
`Defendant John Zimmer (“Zimmer”) co-founded Lyft in 2007 and has served as
`Lyft’s President since March 2013 and as Vice Chairman since January 2019. He has served as a
`Company director since June 2010. In 2019, Defendant Zimmer received $441,346 in salary and
`$1,571,104 in all other compensation for a total compensation of $2,012,450.
`22.
`Defendant Logan Green (“Green”) co-founded Lyft in 2007 and has served as
`Lyft’s CEO and as a Company director since 2007. In 2019, Defendant Green received $441,346
`in salary and $360,218 in all other compensation for a total compensation of $801,564.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 7 of 51
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`23.
`Defendant Brian Roberts (“Roberts”) has been the Company’s Chief Financial
`Officer (“CFO”) since November 2014. In 2019, Defendant Roberts received $441,346 in salary,
`$9,123,624 in stock awards, and $2,664 in all other compensation for a total compensation of
`$9,567,634.
`24.
`Defendant Prashant (Sean) Aggarwal (“Aggarwal”) has served as the Company’s
`Chairman of the Board since January 2019 and as a Company director since February 2016. He
`also serves as a member of the Audit Committee and Compensation Committee. In 2019,
`Defendant Aggarwal received $82,581 in fees earned or cash paid and $259,979 in stock awards
`for a total compensation of $342,560.
`25.
`Defendant David Lawee (“Lawee”) has served as a Company director since
`November 2017. He also serves as the Chairperson of the Compensation Committee and as a
`member of the Nominating and Corporate Governance Committee. In 2019, Defendant Lawee
`received $49,472 in fees earned or cash paid and $259,979 in stock awards for a total compensation
`of $309,451.
`26.
`Defendant Hiroshi Mikitani (“Mikitani”) served as a Company director from March
`2015 until he resigned on August 31, 2020. In 2019, Defendant Mikitani received $30,444 in fees
`earned or cash paid and $259,979 in stock awards for a total compensation of $290,423.
`27.
`Defendant Ann Miura-Ko (“Miura-Ko”) has served as a Company director since
`June 2016, and previously served as a Company director from June 2010 until May 2013. She also
`serves as the Chairperson of the Nominating and Corporate Governance Committee. In 2019,
`Defendant Miura-Ko received $38,817 in fees earned or cash paid.
`28.
`Defendant Mary Agnes (Maggie) Wilderotter (“Wilderotter”) has served as a
`Company director since May 2018. She also serves as the Chairperson of the Audit Committee. In
`2019, Defendant Wilderotter received $49,472 in fees earned or cash paid and $259,979 in stock
`awards for a total compensation of $309,451.
`29.
`Defendant Jonathan Christodoro (“Christodoro”) served as a Company director
`from May 2015 until he resigned in March 2019. He also served as a member of the Compensation
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`Committee.
`30.
`Defendant Ben Horowitz (“Horowitz”) served as a Company director from June
`2016 until June 2020. In 2019, Defendant Horowitz received $36,914 in fees earned or cash paid
`and $259,979 in stock awards for a total compensation of $296,893.
`31.
`Defendant Valerie Jarrett (“Jarrett”) has served as a Company director since July
`2017. She also serves as a member of the Audit Committee and the Nominating and Corporate
`Governance Committee. In 2019, Defendant Jarrett received $41,861 in fees earned or cash paid
`and $259,979 in stock awards for a total compensation of $301,840.
`32.
`Collectively, Individuals Zimmer, Green, Roberts, Aggarwal, Lawee, Mikitani,
`Miura-Ko, Wilderotter, Christodoro, Horowitz and Jarrett are referred to herein as the “Individual
`Defendants.”
`33.
`Collectively, Individuals Green, Aggarwal, Lawee, Miura-Ko, Wilderotter, and
`Jarrett are referred to herein as the “Director Defendants”.
`34.
`Collectively, Defendants Wilderotter, Aggarwal and Jarret are referred to herein as
`the “Audit Committee Defendants.”
`35.
`The Individual Defendants, because of their positions with Lyft, possessed the
`power and authority to control the contents of Lyft’s reports to the SEC, press releases, and
`presentations to securities analysts, money and portfolio managers, and institutional investors.
`Each of the Individual Defendants was provided with copies of the Company’s reports and press
`releases alleged herein to be misleading prior to or shortly after their issuance, and each had the
`ability and opportunity to prevent their issuance or cause them to be corrected. Because of their
`positions and access to material non-public information, each of the Individual Defendants knew
`that the adverse facts specified herein had not been disclosed to and were being concealed from
`the public and that the positive representations being made were then materially false and/or
`misleading.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 9 of 51
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`SUBSTANTIVE ALLEGATIONS
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`IV.
`A.
`Background
`36.
`Lyft is a San Francisco, California-based ridesharing company originally founded
`in 2007. After Uber Technologies, Inc. (“Uber”), it is the second fastest growing ridesharing
`company in the United States and Canada. The Company, via its mobile app, matches passengers
`with drivers of vehicles for hire that, unlike taxicabs, cannot legally be hailed from the street. When
`choosing between Uber and Lyft, many riders go with the cheaper or quicker options. Others are
`swayed by perceptions about safety. The primary services provided by the two Companies are
`essentially the same. Thus, reputation and branding is a key factor to gain a competitive edge as
`the companies compete with one another in this business. Lyft has tried to differentiate itself from
`Uber by massively expanding its bike-sharing business, an industry in which Uber has not
`expanded as strongly.
`37.
`Lyft’s business includes single-use ride fees or subscription fees paid by bike riders
`to access the Company’s fleet of shared bikes, which became part of its business following its
`purchase of Bikeshare Holdings LLC (“Motivate”) in 2018. Motivate had expanded its bikeshare
`system through exclusive contracts in many of the major cities in the United States, including New
`York City’s “Citi Bike” and also provided electric bikes in 2018.
`38.
`Lyft laid out $100 million in capital in connection with the purchase of Motivate’s
`bike-sharing system for the New York metro area in the next five years and assumed certain pre-
`existing contractual obligations to increase the bike fleets in other locations. The Company has
`continually marketed the acquisition of Motivate as an essential part of its early growth. In a blog
`post announcing the acquisition, the Company said “[t]ogether Lyft and Motivate will
`revolutionize urban transportation and put bike-share systems across the country on a path toward
`growth and innovation.” Lyft also committed to “invest[ing] to establish bike offerings in our
`major markets and pursue growth and innovation in the markets where Motivate currently
`operates.”
`B.
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`Lawsuits Reveal Many Incidences of Sexual Assault before the Company
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`Went Public
`39.
`Prior to its initial public offering, Lyft experienced major problems with sexual
`assaults committed by its drivers and its inability to implement appropriate measures to prevent
`and respond to these instances. Following the IPO, extensive news coverage and lawsuits exposed
`Lyft’s sexual assault problem with its drivers. Numerous lawsuits, including class actions, allege
`the Company failed to protect its customers from harms, and, more importantly, failed to
`adequately respond to and remedy past instances of assault. Instead of taking timely action by
`introducing easily implemented and available procedures, training, and policies to deal with these
`drivers, the Individual Defendants failed to respond.
`40.
`The reason for this inaction was partly because the Company, with various pending
`litigations, was concerned that taking affirmative disciplinary would result in Lyft’s drivers being
`classified as “employees” instead of “independent contractors.” If these drivers were classified as
`employees, the Company was concerned with the associated legal obligations arising from such a
`classification including exposing the Company to greater potential liability and compliance costs.
`Further, at the time of the IPO, Lyft’s application and communication methods lacked any safety
`features that might allow a passenger to immediately report a sexual assault instance or other
`misconduct committed by a driver. Lyft’s background check policy was also deficient. Indeed, the
`policy failed to include a background check of prospective drivers spanning the prior five years.
`41. While the exact numbers of incidences of sexual assaults cannot be specified
`because Lyft has not yet released the actual numbers, the various lawsuits filed provide examples
`of the many incidents which occurred prior to Lyft’s IPO as well as customers’ experiences with
`Lyft’s procedures and oversight in response to these incidents. Notably and in stark contrast, as
`Uber has made public information concerning the number of assaults reportedly committed by its
`drivers.
`42.
`Both prior to and during the Relevant Period, hundreds of incidents were reported
`to Lyft and Lyft was sued by women in various states. Some of these actions were consolidated
`and relate to events dating as far as 2014. The lawsuits allege that Lyft failed to take active
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`measures to ensure that female passengers were safe. And when women reported the incidents to
`Lyft, the Company did little or nothing to remedy the situation.
`43.
`The examples below illustrate the hundreds of experiences of sexual assault that
`women suffered because of Lyft’s inaction. These instances would have become known if Lyft did
`what Uber did and publicly reported them. In one lawsuit related to a series of sexual assaults
`which occurred as early as 2015 and was filed by 19 Plaintiffs (many of whom do not wish to be
`named), one woman detailed an incident where she was raped by a Lyft driver and that afterward
`“they [Lyft] didn’t even really say sorry at all. They just said, ‘OK, well we’re going to send you
`your money back.’” She explained Lyft’s response after the incident: “I didn’t even get an email.
`It was crazy. They kind of just pushed it under the rug, and were like, ‘whatever.’”1
`44.
`Another survivor, who wished to remain anonymous, said she had fallen asleep in
`the back of a Lyft car and woke to the driver molesting her from the front seat. Fearing for her life
`and thinking of her 7-year-old son, she fought back. The driver pulled over on a dark street and
`they tumbled out of the car. Her arm was caught in the vehicle as he eventually drove away,
`dragging her body on the pavement. She broke free and crawled to a nearby house where a woman
`answered the door and helped her.2
`45.
`After reporting the incident to Lyft, she never heard whether the driver was
`deactivated. This kept her up at night as the driver knew where she lived. The woman noted, “If
`there was a camera in the car that night, I can almost guarantee that nothing would have happened,”
`and “I think Lyft has done a super, super great job hiding all of this.”
`46.
`Another plaintiff in one of these many lawsuits said that she was among many who
`deleted the Uber app in 2017 because of reports of internal sexual harassment at the company.
`Later that year when she took a Lyft after a night out with friends, she was kidnapped at gunpoint,
`driven across state lines, and gang-raped by the driver and at least two other men. “I thought I was
`
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`1Jane Roe 1 et al v. Lyft, Inc. et al. (No: CGC-19-581262) Ca. Sup. Ct (filed 12/04/2019).
`2 Id.
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`being a good feminist that night by choosing Lyft, Uber wasn’t on my phone at the time. . . But
`look where it got me, look where my good and safe decision landed me.”3
`47.
`In these and many similar lawsuits, hundreds of female victims have alleged that
`Lyft could have easily done more to protect them by requiring in-car video monitoring and
`conducting fingerprint-based background checks. They alleged that Lyft did not adequately
`investigate customer complaints of sexually inappropriate behavior.
`48.
`Only many years after the incident first began in 2015, and in response to these
`lawsuits, a Lyft spokesperson Ashley Adams announced that Lyft had implemented new safety
`features such as “15 new safety features…including in-app emergency assistance, continuous
`criminal background monitoring of drivers and mandatory feedback for rides rated less than four
`stars.”4 Adams further said, “We know this work is never done, which is why we continue to invest
`in new products, policies and features to make Lyft an even safer platform for our community.” In
`fact, these measures may have prevented many of the sexual assaults and the technology was
`available and would have been easy to implement by Lyft many years earlier, and throughout the
`Relevant Period.5
`49.
`The multitude of reports of sexual assault incidences, and Lyft’s response, as
`outlined above, called into question the image of corporate responsibility that Lyft promotes
`against its larger rival, Uber, which has also been plagued by sexual assault claims against its own
`drivers. When Uber’s former CEO Travis Kalanick resigned after accusations of rampant sexual
`harassment inside the company in 2017, defendant Zimmer told the New York Times, “There’s
`nothing to celebrate in this situation.” But, he added, “It does shine a light on the importance of
`values and ethics.”6 Mr. Zimmer’s public comment was conflicting in that he preached that values
`
`
`3 Alison Turkos v. Lyft, Inc. et al (No. CGC-19-579280) (Ca. Super. Ct.) (Filed: 09/17/2019).
`4 https://apnews.com/article/4634719e61021bf6b9995075c39c36e6 (last accessed October 20,
`2020).
`5 Id.
`6 Id.
`
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 13 of 51
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`and ethics are important when responding to these sexual harassment incidences at Lyft’s main
`competitor, Uber, yet Lyft’s history of inadequate responses did not suggest it had an exemplary
`record on sexual harassment.
`50.
`Indeed, Uber’s actions taken in response to these incidences stand in stark contrast
`to Lyft. Following the announcement of its issuing of a safety report and that it would not bind
`sexual assault victims to an arbitration clause for related claims in early May 2018, Uber also
`issued a “safety review” for 2017 and 2018 on December 5, 2019. This review showed that Uber
`had reports of “5,981 allegations of serious sexual assault in the U.S.” and that approximately
`3,349 of those instances were reports by passengers against drivers.7
`51.
`Even though Lyft boasts that it is a “safe, progressive alternative”8 to Uber, Lyft
`has not published any report of sexual assault incidences despite announcing that it would issue a
`safety report on May 15, 2018, more than two years ago. Given that 75% of Lyft drivers also drive
`for Uber, it is likely that Lyft’s sexual assault records are similar, or worse, than the numbers of
`reports released by Uber.
`52.
`Lyft runs promotions at bars and with beer companies offering free or discounted
`drinks to customers who show the Lyft app and say they plan to take a Lyft ride home. Some of
`Lyft’s promotions advertised, “Drink up. We’re driving,” and promised, “We partnered with select
`local bars to get you home safe.” These marketing actions led women to believe Lyft was a safe
`alternative to Uber during the Relevant Period.9
`53.
`The documented lack of Lyft’s action and delay in accurately reporting sexual
`assaults questions whether Lyft’s assertion during the Relevant Period that it was a “safe
`alternative” was true and whether the Company’s leadership was additionally issuing false
`statements. The record reflects that in its rush to compete with Uber, the Company placed profits
`
`
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`7 Id.
`8 Id.
`9 Id.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 14 of 51
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`before safety. Organizations that work with sexual assault victims have applauded Uber’s efforts
`to tackle safety issues after the company released its long-awaited safety report. However, Lyft
`has largely remained silent on its own problems with assault, noting that it, too, will release a
`safety transparency report but has not announced when such a report would be released.10
`C.
`Lyft’s New Bike Fleet was Plagued by Safety Defect Before the Company
`Went Public
`54.
`Before Lyft bought Motivate, Motivate’s bikes experienced numerous problems
`regarding maintenance of its fleet of electronic bikes. On September 26, 2018, StreetsBlog
`published an article titled “It’s Not Your Imagination, Something is Seriously Wrong With Citi
`Bike Right Now,” revealing that “[i]n the last two weeks, 21 percent of its [bikes] have simply
`disappeared” and that “there were only 7,166 Citi Bikes in service on Tuesday, Sept. 25, down
`from 9,112 bikes two weeks earlier.” The article further stated that Citi Bike was “far and away
`the world’s worst-maintained [bike-share] system” and that “[n]o other comparable bike-share
`system comes even close to having 41 percent of its fleet simply unavailable.”11
`55.
`Further, Motivate admitted that many of its bikes were in need of repair, saying
`“Keeping the bike fleet in a state of good repair is a key priority for Citi Bike, and right now we
`have a backlog of bikes that are due for maintenance and repairs” and also that “[w]e are putting
`extra resources toward getting these bikes back out on the street and expect fleet levels will
`improve soon.”12
`56.
`On February 28, 2019, Medium published an article, written by Caroline
`Samponaro, Lyft’s Head of Bike, Scooter, & Pedestrian Policy, in which Samponaro said:
`To date, we’ve only deployed electric bikes on a relatively small scale in select
`cities. That’s about to change, because of the results we’ve seen. The early data
`hints at the enormous potential:
`
`
`10Id.
`11 https://nyc.streetsblog.org/2018/09/28/de-blasio-seeks-no-sanctions-for-citi-bike-contract-
`violation/
`(Last visited October 21, 2020).
`12 Id.
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`Case 3:20-cv-09257-JSC Document 1 Filed 12/21/20 Page 15 of 51
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`So far, we’ve piloted electric bikes in our bikeshare networks in the Bay Area, New
`York City and Washington DC area. Altogether, riders have pedaled more than
`912,000 trips on electric bikes since our pilots began.
`
`***
`
`You know Lyft as a rideshare company,