Uber Facing Class Action After News of Guardian Leak Hurts Stock Price

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Uber faces a proposed class action over a drop in stock price that allegedly stemmed from the revelation last month that a cache of hundreds of thousands of internal records were leaked to The Guardian and subsequently shared with the International Consortium of Investigative Journalists (ICIJ) and other media outlets. 

The 25-page securities complaint relays that although Uber, following years of bad press, touted changes to its top management and reforms to corporate culture and positioned itself as a company that had “atoned for its prior compliance and cultural issues,” the trove of 124,000 leaked records spanning from 2013 to 2017, dubbed the “Uber files,” made plain that the ride-hailing company had not been as transparent as it seemed. 

According to the suit, the files shared with The Guardian, the ICIJ and others revealed, among other things, that Uber met secretly with “various government officials and politicians to skirt laws and regulations around the world” and risked drivers’ safety to advance the company’s interests. Moreover, the Uber files disclosed that the foregoing conduct was “known to, and in fact encouraged by, the Company’s top management,” the lawsuit says. 

After news of the Uber files broke on July 10, 2022, the company’s stock price fell $1.15 per share, or by more than five percent, to close at $21.19 per share on July 11, according to the case. 

In light of the Uber files, the lawsuit alleges Uber and its top execs, from May 31, 2019 through July 8, 2022, made false and misleading statements, or failed to disclose, that Uber still had in place “defective controls and procedures,” and downplayed or concealed the full scope and severity of its prior misconduct. Uber was also allegedly not upfront with investors with regard to the fact that, as a result of the foregoing, Uber’s current global footprint and market share “is in significant part the byproduct of previously undisclosed, unsustainable, and illegal business practices,” all of which, once revealed, would likely harm Uber’s reputation and expose the company to a heightened risk of governmental and regulatory scrutiny, the suit states. 

“As a result of Defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the Company’s common stock, Plaintiff and other Class members have suffered significant losses and damages,” the lawsuit alleges. 

Between July 10 and 11, 2022, The Guardian published a series of exposés based on the Uber files, citing “more than 83,000 emails, iMessages and WhatsApp messages” among company management that revealed the “inside story” of how the company “[f]louted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion,” the lawsuit states. 

Per The Guardian, the Uber files showed how the company “tried to shore up support by discreetly courting prime ministers, presidents, billionaires, oligarchs and media barons” with tactics that often involved sidestepping city mayors and transportation authorities. 

Further, The Guardian revealed that Uber knowingly put drivers in harm’s way, including by sending drivers into potentially dangerous protests by taxi drivers across Europe, the suit relays. 

The lawsuit looks to cover all persons and entities who purchased or otherwise acquired Uber common stock between May 31, 2019 and July 8, 2022. 

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