Lyft co-founder Logan Inexperienced retains board seat regardless of shareholder opposition

Logan Inexperienced, the co-founder and former CEO of ride-hailing platform Lyft, will stay on the corporate’s board regardless of opposition from some shareholders, in keeping with preliminary outcomes from the corporate’s annual shareholder assembly Thursday.

The SOC Funding Group, a corporation that claims it holds firms and management accountable for irresponsible and unethical company habits, despatched a letter to Lyft shareholders in Might urging them to vote in opposition to Inexperienced’s place on the board. The group stated Inexperienced “bears specific duty for failing to correctly deal with mounting concern over rideshare driver security.”

The group cited analysis that discovered ride-hail drivers have skilled unsafe working circumstances akin to verbal abuse, bodily assault, theft, carjacking and even homicide. Inexperienced, as co-founder and CEO, constantly ignored his duty to deal with these issues and maintain drivers secure, they argued.

SOC additionally accused Lyft of failing to offer up to date details about driver security and for reporting assaults inconsistently The group pointed to a California Public Utilities Fee report that confirmed 9,959 assault or harassment instances in 2021, which it says was inconsistent with Lyft’s 2021 group security report. The latter included a decrease quantity nationally: 4,158 sexual assaults within the U.S. from 2017 to 2019.

“Both security issues have elevated considerably, or inconsistent definitions are making comparisons troublesome, indicating the significance of ongoing, annual updates to Lyft’s driver security disclosure,” SOC Funding Group wrote.

Lyft informed TechCrunch that bettering driver security is “elementary to all the things we do” and is a crucial focus for Risher.

“Whereas security incidents on our platform are extremely uncommon, we understand that even one is just too many,” Lyft informed TechCrunch.

Driver security wasn’t addressed throughout the quick shareholder assembly Thursday. One shareholder requested about how driver deactivations are managed. Driver deactivations — when Lyft removes a driver’s entry to the platform as a result of rider complaints — is a continuous ache level for drivers, who declare to be booted with out warning or purpose. Drivers of Lyft and Uber say the platforms don’t present sufficient transparency into causes for deactivation, so the drivers suspect false complaints from riders.

“We don’t explicitly describe the requirements that have been violated when the deactivation occurs, and there’s a purpose for that,” stated CEO David Risher. “For each reported incident, we have to steadiness offering as a lot transparency as we are able to for drivers, however on the similar time shield the security of the reporting celebration. Now, having stated that, we’re working actually exhausting to offer drivers with extra readability into the explanation why they have been deactivated once we can and make it simpler for drivers to trace and help the entire investigation course of from finish to finish. We’re additionally engaged on gathering extra data from our riders to determine and cut back false reporting, which might sometimes occur.”

The opposite two proposals in Lyft’s proxy assertion — relating to the appointment of an impartial registered public accounting agency and the compensation of named govt officers — have been accepted, in keeping with preliminary outcomes.

ISS, a company governance administration firm, backed SOC’s letter and added its personal issues, together with the “failure to vary its labeled board construction and for sustaining a multi-class capital construction with unequal voting rights.”

ISS factors to Lyft’s governance mechanisms akin to staggered director elections and dual-class voting rights as a hindrance to making sure that administrators take steps to mitigate long-term danger. Lyft’s dual-class construction empowers Inexperienced and John Zimmer, co-founder and former president, lengthy after they depart the corporate. They each nonetheless maintain high-voting shares that entitle them to twenty votes per share till each of them are useless. If one dies or turns into incapacitated, Lyft’s sundown clause allows the remaining co-founder to regulate the votes of the deceased/incapacitated co-founder. And once they’re each useless, a trustee will retain the final dwelling co-founder’s full voting powers for a transition interval of 9 to 18 months.

“With improved governance mechanisms, the board might be anticipated to be extra accountable and aware of long-term shareholders, akin to these raised by the proponent,” stated ISS in a press release.

This text has been up to date with a remark from Lyft.

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