Uber Investor Lawsuit Claims Rider Safety Took Back Seat to Gig-Work Model

Uber is facing a shareholder lawsuit that puts the company’s rider safety practices under a different kind of legal microscope.

According to Business Insider and Reuters, the Police and Fire Retirement System of the City of Detroit, a minority Uber investor, filed a lawsuit in California federal court accusing Uber’s board and senior leadership of failing to adequately address sexual assault allegations involving drivers on the platform.

The lawsuit names Uber CEO Dara Khosrowshahi and members of the company’s board. It alleges that Uber “knowingly cut compliance corners in the name of growing the company.”

The complaint comes as Uber continues to defend thousands of sexual assault lawsuits filed by passengers who allege they were assaulted, abused, or harassed by Uber drivers.

Unlike lawsuits filed directly by survivors, this new case was filed by an Uber investor. The central allegation is that Uber’s leadership failed to properly oversee safety and compliance issues, exposing the company to major legal, financial, and reputational harm.

The complaint alleges that Uber knew sexual assault and misconduct were ongoing problems on its platform, but did not do enough to reduce the risk to riders.

“Uber faces significant liability in defending these suits and responding to inquiries, in addition to the hundreds of millions of dollars at stake,” the complaint states. “Uber has also seen its reputation irredeemably damaged by the negative ongoing media coverage of the wrongdoing.”

Uber has denied the allegations.

An Uber spokesperson told Business Insider that the lawsuit “ignores important facts and is based on misleading, false narratives from other meritless lawsuits that we have already addressed publicly and in the courtroom.”

Uber has repeatedly said that serious safety incidents are rare on its platform and that the company continues working to improve trip safety.

One of the most important parts of the shareholder lawsuit is its focus on Uber’s gig-work model.

The complaint alleges that Uber considered several safety measures that could have helped reduce misconduct, including in-car cameras, stronger background checks, and systems that could better match women riders and drivers.

According to the lawsuit, Uber studied adding in-car cameras around 2017 and found the plan to be feasible, cost-effective, and likely to reduce misconduct. But the complaint alleges Uber declined to move forward because requiring or controlling in-car cameras could have weakened the company’s argument that drivers are independent contractors.

That allegation goes to the heart of the case.

Uber’s business model depends heavily on treating drivers as independent contractors rather than employees. Independent contractors generally are not entitled to the same benefits and protections as employees, and companies often have less direct control over how independent contractors perform their work.

The shareholder lawsuit argues that Uber’s desire to preserve this model may have discouraged the company from adopting stronger safety measures.

The shareholder lawsuit is unfolding alongside the federal Uber sexual assault multidistrict litigation, known as an MDL.

An MDL is a legal process that brings similar lawsuits together before one federal judge for coordinated pretrial proceedings. The goal is to make discovery, motions, and trial preparation more efficient when many people are making similar claims against the same defendant.

The federal Uber sexual assault MDL includes more than 3,000 similar lawsuits. Hundreds of other Uber sexual assault cases are also pending in state courts.

The lawsuits generally allege that Uber failed to adequately protect passengers from driver sexual assault and misconduct. Plaintiffs have raised concerns about driver screening, safety warnings, complaint handling, and whether Uber did enough to respond to known risks on the platform.

The first two federal Uber sexual assault bellwether trials have both ended with plaintiff verdicts, although the damages awards were very different.

In the first trial, a federal jury returned an $8.5 million plaintiff verdict. That case was closely watched because it was the first major federal test case in the Uber sexual assault litigation.

In the second trial, a jury also found for the plaintiff but awarded $5,000 in damages.

Bellwether trials are important in mass litigation because they help both sides understand how juries may respond to evidence, legal arguments, and damages claims. They do not decide every pending lawsuit. But they can influence settlement discussions and litigation strategy.

The two verdicts send a mixed but important signal. Jurors in both cases found enough evidence to hold Uber responsible, but the amount of damages depended heavily on the facts of each case.

For survivors, the shareholder lawsuit is important because it raises questions that go beyond any one ride or any one driver.

The case asks whether Uber’s leadership and board knew about ongoing safety problems and failed to take stronger action. It also asks whether business concerns, including cost-cutting and protection of the independent-contractor model, were prioritized over rider safety.

Those questions are similar to the concerns raised in many survivor lawsuits.

Survivors have alleged that Uber promoted its platform as safe while failing to adopt stronger protections that could have reduced the risk of assault or misconduct. The shareholder complaint appears to put some of those same safety issues in front of the court from an investor perspective.

The lawsuit does not resolve the underlying survivor claims. It also does not mean Uber has been found liable in this shareholder case.

But it adds another layer of legal pressure at a time when Uber is already facing thousands of sexual assault lawsuits, two plaintiff bellwether verdicts, and continued scrutiny over how the company handles rider safety.