Lyft Investors Call for More Safety Protections for Drivers

Article

A group of Lyft Inc. shareholders is calling on the company to establish stronger safety protections for drivers, change its shareholder voting structure and subject directors to annual elections.

SOC Investment Group — which represents pension funds that hold shares in the ride-hailing company — urged the company to publish an annual report on the safety of drivers, whom the group said are subject to significant “verbal abuse, physical assault, and robbery.” In a March 31 letter to Sean Aggarwal, recently appointed as Lyft’s lead independent director after serving as chairman, SOC said the company needs pay practices that encourage safe rides and to establish a due process in which drivers feel entitled to turn down unsafe rides.

The pension funds that SOC represents hold less than a 1% stake in Lyft, but the group has taken aim at several high-profile companies with some success. It recently targeted JPMorgan Chase & Co., pushing the company to conduct a racial equity audit and then criticizing the resulting report. The group has also called on McDonald’s Corp. to perform a similar audit, saying its franchised model had created blind spots and possible risks related to the equitable treatment of restaurant workers.

A spokesperson for Lyft declined to comment. Aggarwal deferred to the company for comment.

Lyft’s failure “to acknowledge and address legitimate driver safety concerns will have a number of unfortunate consequences for the company, including elevated turnover rates and recruitment costs, increased insurance expenses, litigation, and further scrutiny from regulators,” Tejal Patel, executive director at SOC, said in the letter made public on Friday.

SOC is also calling on Lyft to move to a one-share-one-vote structure for shareholders and a board elections process that would require directors to stand for reelection annually. SOC previously criticized Lyft’s dual-class share structure in the run-up to Lyft’s initial public offering in 2019. It gave co-founders Logan Green and John Zimmer super-voting shares, granting them 20 votes for every one vote held by other investors, in perpetuity.

The demands come after Lyft announced in March that Green and Zimmer were stepping down from managing the company’s day-to-day operations and that David Risher would replace Green as chief executive officer. The leadership shuffle also resulted in changes to Lyft’s board, with Green and Zimmer taking over as chair and vice chair, respectively.

Photo: Photographer: David Paul Morris/Bloomberg