When Juno first appeared as a new ridesharing service, in competition with Uber and Lyft, it seemed to have a brilliant idea: to attract the best drivers, with promises of equity shares in the company. However, according to the complaint for this class action, Juno’s promises were deceptive and, when the company was sold, drivers were left with little or no compensation for their restricted stock units (RSUs).
This class action proposes the following class and three subclasses:
According to the complaint, Juno planned to take on behemoths Uber and Lyft in New York City by attracting drivers who had TLC licenses or who had already been trained by Uber or Lyft, and by purchasing the right insurance to operate a taxi in New York City. The complaint claims Juno also wanted drivers to keep working for Uber and Lyft and to promote Juno to the passengers they picked up.
To attract these elite drivers, the complaint says, Juno offered them an irresistible offer: equity ownership in the company. If Juno’s strategy worked and it was able to compete with Uber and Lyft, the complaint says, the company could become very valuable one day.
According to the complaint, Juno gained value by marketing itself as pro-driver and advertising that it was giving its drivers this equity stake. Since Uber and Lyft had received bad press for the alleged exploitation of drivers, the complaint claims, this socially responsible arrangement attracted customers as well as top-rated drivers and Juno was able to penetrate the highly-competitive New York City market.
Its idea worked so well, the complaint alleges, that in April 2017 it was able to sell itself for $200 million, so that Juno’s CEO, Talman Marco, and its parent company, Vulcan Cars LLC, did very well, and purchaser GT Forge, Inc. (Gett) acquired a highly skilled workforce. Unfortunately, the complaint says, the drivers’ shares in the company turned out to be worthless, or nearly so. Although the company was continuing, the complaint says, the equity ownership program was terminated, and shares were extinguished with the drivers given little or nothing in exchange.
The claims in this class action are extensive. They range from the improper compensation for shares to Juno’s taking a larger commission than promised from drivers; from false advertising to securities fraud and a shareholder derivative claim.