The derivative lawsuit, filed in federal court in San Francisco, accuses the board and executives of breaching their duties by allowing compliance lapses to persist despite internal and external alerts over passenger safety. The action is led by the Police and Fire Retirement System of the City of Detroit and names Chief Executive Dara Khosrowshahi among the defendants.
The complaint says Uber’s leadership overlooked repeated signs that its systems were not doing enough to prevent, detect or respond to sexual assault and harassment allegations involving drivers on the platform. It argues that the alleged failures damaged the company’s reputation, exposed it to legal claims and created financial risk for shareholders.
Uber rejected the allegations, saying the lawsuit ignores important facts and relies on misleading narratives from other cases that the company has already addressed publicly and in court. The company has maintained that safety remains central to its operations and that it has invested heavily in tools designed to protect riders and drivers.
The shareholder action comes as Uber faces thousands of lawsuits linked to alleged sexual misconduct by drivers. As of June 1, the company was facing 3,571 lawsuits in litigation overseen by the same San Francisco court, with claims alleging assault, harassment and inadequate safety controls. The allegations in those cases remain contested.
Shareholders allege the board knew Uber’s safety record was a material business risk. The complaint says directors were told that fewer than 40 per cent of users believed the company took safety seriously, a figure cited as evidence that trust in the platform had weakened despite public commitments to safety.
The case also broadens the claims beyond sexual misconduct. Shareholders point to other compliance disputes, including a federal disability-rights lawsuit alleging that passengers with service animals or stowable wheelchairs were denied rides, and a separate consumer case over Uber One subscription billing and cancellation practices. Uber has denied wrongdoing in those matters as well.
The lawsuit seeks to make directors reimburse Uber for alleged breaches of fiduciary duties and securities law violations. Any recovery in a derivative case would typically go to the company rather than directly to individual shareholders, making the action a test of whether investors can hold board members financially responsible for alleged oversight failures.
The governance challenge is significant because it targets Uber’s board-level supervision rather than only the conduct of individual drivers or customer-service processes. The shareholders argue that safety and compliance were mission-critical risks for a business built on matching passengers with drivers through a digital marketplace.
Uber has repeatedly said serious safety incidents represent a tiny fraction of trips. Its published safety reporting has stated that most trips end without incident and that serious sexual assault reports declined across earlier reporting periods. The company has introduced features including in-app emergency assistance, trip sharing, RideCheck alerts, audio recording in some markets, driver background checks and technology designed to flag risky dispatch patterns.
Critics argue that platform-based transport companies still face structural safety challenges because drivers are generally classified as independent contractors, trips occur in private vehicles, and enforcement depends heavily on reporting after incidents occur. Plaintiffs in the broader litigation have challenged whether app-based screening, deactivation rules and support systems are adequate for a service used at large scale.
The latest lawsuit also arrives after a federal jury in Arizona awarded $8.5 million to a passenger in a sexual assault case earlier this year. The verdict found Uber liable under an apparent-agency theory, though the company was not found negligent in its safety practices and has said it plans to appeal. The decision is being watched closely because it was the first federal bellwether case tied to the consolidated litigation.
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