Ridesharing

Driver Guild Says Uber Competitor, Juno, Misled Drivers

For New York independent drivers and their passengers, the birth of local Uber rival Juno last year seemed like good news. Many drivers worked for both companies, doubling their business. Many also had claim to Juno stock units that, it turned out, the company would never — and could never — distribute.

So when Juno sold itself to Gett for $200 million last month, the Independent Drivers Guild (IDG; an organization representing Uber drivers in New York) filed a complaint to the Federal Trade Commission over the misleading stock program.

The program promised to distribute restricted stock units to independent contractors driving for the company and allow them to share in the fruits of an eventual sale or initial public offering. But the guild’s complaint, filed Tuesday (May 16), said the legality of the program had been questionable from the start.

“It is clear that Juno misled drivers on both the company’s intention to share a stake with drivers and the value of the shares program,” Ryan Price, the executive director of the IDG, wrote in the letter.

Prior to the sudden sale, Juno was breaking even and had been for months, a source familiar with Juno’s finances told Bloomberg. But investors didn’t want to funnel money into the underdog in an Uber- and Lyft-dominated market.

Juno could read the writing on the wall: Without investor support, their little ride-share service could never expand beyond the city. So they pursued a sale to Gett, announced in late April, promising small cash payouts to drivers to compensate for the cancelled stock plan. Drivers had not yet received the payments as of May 16.

In a similar case, Uber recently agreed to pay $20 million after the Federal Trade Commission flagged its advertised hourly and annual income figures as “exaggerated” and “misleading.” According to the FTC, less than 10 percent of drivers in New York and San Francisco earned the annual income touted by the company.

While this turn of events may spell the end for Juno, it’s a feather in their cap for the IDG.

Like Juno, this group formed a year ago in New York. Unlike Juno, it had a harder time gaining trust, since it was founded by Uber and the International Association of Machinists and Aerospace Workers — thus giving the appearance of a conflict of interest anytime it took a stance against an Uber competitor.

The FTC complaint definitely bolsters the guild’s credibility, but the IDG isn’t stopping there. It recently started collecting dues from some members to help loosen financial ties to Uber. It convinced the city to require an option to tip the driver in mobile ride-hailing apps, regulate the pay of ride-hailing drivers and limit the number of drivers on the road.

“Whatever the issue is, we want to make some improvements in working conditions,” said Price.

Click to comment

TRENDING RIGHT NOW

To Top