New York City drivers who worked for Uber and Lyft rival Juno allege in a proposed class action lawsuit that the company and its CEO, along with parent company Vulcan Cars LLC and investment group GT Forge Inc. (doing business as Gett), cheated the workers with ostensible equity ownership shares in the ridesharing company that turned out to be worthless.
I’ve never heard of Juno.
Many haven’t. To realize the scope of the suit’s allegations, it helps to have some background about where Juno came from, its goals, and its plan to, “in a sinister fashion,” disrupt the mobile taxi space dominated by Uber and Lyft.
Filed by three New York City taxi drivers who’ve worked for Lyft and Uber and some of the companies’ “fringe competitors,” the case says Juno was founded in February 2016 with the strategy of acquiring its rivals’ most valuable assets—drivers. But not just any drivers, the case continues:
“Drivers with TLC-licenses. Drivers with the right insurance to operate as a taxi in New York City. Drivers who were familiar with the mobile taxi technology and the hurdles one encounters in that job,” the 29-page complaint reads.
In short, Juno specifically sought drivers already trained by Uber and Lyft—via up-front “signing bonuses” or “transfer bonuses”—who could start working and collecting fares immediately while promoting the up-and-coming taxi start-up. According to its promotion and advertising materials at the time, Juno billed itself as “socially responsible” and even set a target date—2026—at which point half of the company would purportedly be distributed to drivers, the suit claims.
Before we go any further, how are consumers like me involved in any of this?
It’s important to keep in mind that stories of driver mistreatment at the hands of Uber and Lyft go beyond the workers themselves, and predate Juno’s founding.
By positioning itself as socially responsible, thereby piggybacking on any consumers looking for a more worker-friendly ride-sharing alternative to Uber and Lyft, Juno’s “marketing strategy was to attract drivers and customers” away from its rivals, the lawsuit says.
While the case primarily argues Juno’s workforce received the brunt of the ramifications from its allegedly unconscionable business practices, it does not leave consumers—who were allegedly lied to by an up-and-coming start-up—out of the mix.
“As for consumers, Juno understood that consumers picking between Juno, Uber, Lyft, or another ridesharing company, give substantial consideration to which company compensates its drivers the best,” the lawsuit alleges. “Juno’s claim as the only company where riders actually have an ownership stake was a significant marketing advantage.”
How could a start-up hope to pull drivers away from Uber and Lyft?
The short answer, according to the lawsuit? Deception and false promises.
Juno’s two-prong strategy to acquire “elite” drivers included positioning itself as a “pro-driver” company while promising those who signed on equity ownership stakes. The more they drove for Juno—with the benchmark of 120 hours driven per month—the more equity drivers would acquire in the company, the lawsuit says.
The case claims that after mustering “tremendous value” from its early positioning efforts, what followed for Juno was, according to the lawsuit, “the start of a modern-day start-up fairy tale,” with the company announcing its sale for $200 million almost overnight. The company’s CEO, its parent company, and Juno’s investors were enjoying the early fruits produced mostly by its “highly skilled and ready-to-go workforce.”
But . . .
Here’s where we get into the lawsuit’s allegations. Remember those equity shares drivers were promised?
“The drivers were not riding high,” the lawsuit says. “They were still driving for Juno. But they had nothing to show for Juno’s success.”
“Juno made it all up.”
Upon signing up to drive for Juno, many individuals—ones who were top-rated while driving for Uber and Lyft—opted to accept $100 in shares rather than a $100 cash sign-up bonus.
The plaintiffs allege that drivers’ supposed equity shares became worthless after Juno inexplicably terminated the program granting drivers stakes in the company. Existing shares, the lawsuit continues, were either dissolved for no value or swapped in exchange for cash amounts that were a fraction of what drivers say they’re owed under their original agreement with the Juno.
“Juno made it all up. A series of blatant falsehoods in the chase of a hundred-million-dollar buyout offer. [Juno’s CEO] did not found and build a pro-driver company where everybody owns a share. Once Juno, [its CEO] and the investors had a $200 million offer in sight, they swiftly and resolutely turned their back on driving partners.”
The lead plaintiffs allege breach of contract, false advertising, intentional misrepresentation, and securities fraud under state and federal laws.
Who’s covered by this lawsuit?
The case seeks to represent a class of individuals who worked for Juno throughout the United States, as well as three subclasses:
RSU Subclass – drivers who worked for Juno and received restricted stock units;
$100 Promotion Subclass – individuals who chose to receive $100-worth of restricted stock units in lieu of $100 cash as part of Juno’s promotion offer made to new drivers;
Referral Subclass – all class members who referred a driver to Juno, and that individual then went on to work for Juno without being compensated with the agreed-upon percentage of the driver’s fares.