Lyft Reaches $25 Mln Settlement With Shareholders

(RTTNews) - Ride-hailing service Lyft (LYFT) has agreed to a $25 million settlement with shareholders over allegations that the company failed to disclose problems within its business before its IPO.

According to shareholder, the ride-hailing company concealed safety problems, including sexual assaults by drivers, prior to its 2019 initial public offering.

The preliminary settlement agreement, detailed in a court filing Thursday, is pending approval by Judge Haywood S. Gilliam, Jr. of the Northern District of California. The settlement amount will be distributed to shareholders.

"This settlement resolves a shareholder class action related to statements in Lyft's initial public offering and its financial impact on investors— it's not about safety-related claims on the platform," said Lyft spokesperson Gabriela Condarco-Quesada in a statement to CNN Business Thursday evening.

The San Francisco-based company raised $2.34 billion in its IPO in 2019.

"Lyft cultivated a brand image as a safer, more socially conscious rideshare alternative with a focus on appealing to female passengers," Thursday's filing 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."