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, and group that claims it holds companies and management accountable for irresponsible and unethical company habits, despatched a letter to Lyft shareholders in Could urging them to vote in opposition to Inexperienced’s place on the board. The group mentioned Inexperienced “bears explicit accountability 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 equivalent to verbal abuse, bodily assault, theft, carjacking and even homicide. Inexperienced, as co-founder and CEO, constantly missed his accountability to deal with these considerations and hold 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 neighborhood 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 tough, indicating the significance of ongoing, annual updates to Lyft’s driver security disclosure,” SOC Funding Group wrote.

Lyft didn’t reply in time to remark.

Driver security wasn’t addressed in the course of the brief shareholder assembly Thursday. One shareholder requested about how driver deactivations are managed. Driver deactivations — when Lyft removes a driver’s entry to the platform attributable to rider complaints — is a continuing ache level for drivers, who declare to be booted with out warning or cause. 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 had been violated when the deactivation occurs, and there’s a cause for that,” mentioned CEO David Risher. “For each reported incident, we have to stability offering as a lot transparency as we are able to for drivers, however on the identical time shield the protection of the reporting get together. Now, having mentioned that, we’re working actually laborious to offer drivers with extra readability into the the reason why they had 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 establish and cut back false reporting, which might sometimes occur.”

The opposite two proposals in Lyft’s proxy assertion — concerning the appointment of an unbiased registered public accounting agency and the compensation of named govt officers — had been accredited, in keeping with preliminary outcomes.

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

ISS factors to Lyft’s governance mechanisms equivalent to staggered director elections and twin class voting rights as a hindrance to making sure that administrators take steps to mitigate long-term threat. Lyft’s dual-class construction empowers Inexperienced and John Zimmer, co-founder and former president, lengthy after they go away 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 permits the remaining co-founder to regulate the votes of the deceased/incapacitated co-founder. And after they’re each useless, a trustee will retain the final residing co-founder’s full voting powers for a transition interval of 9 to 18 months.

“With improved governance mechanisms, the board may very well be anticipated to be extra accountable and attentive to long-term shareholders, equivalent to these raised by the proponent,” mentioned ISS in an announcement.