MANHATTAN (CN) — Juno, which advertised itself as a driver-friendly rival to Uber and Lyft, was a “classic bait and switch” that enriched its founders and shortchanged its employees, New York City drivers say in a federal class action.
Suing on behalf of drivers who jumped ship from Uber or Lyft, lead plaintiff Mohammed Razzak claims Juno’s promises of equity sharing was a “modern day startup fairy tale” that turned into a bait and switch when the company was bought for $200 million in April by co-defendant GT Forge dba Gett.
With unhappy drivers filing employment lawsuits that put Uber and Lyft in the news, Juno entered the market by advertising that its drivers would be owners of the company, with share distributions being made until 2026, until drivers would own 50 percent of the “socially responsible.”
Juno recruited highly rated Uber/Lyft drivers licensed by the New York City Taxi and License Commission. Such drivers would already be insured, and familiar with New York City streets and the mobile technology, Razzak and two named co-plaintiffs say in the June 9 lawsuit.
To attract drivers, Juno offered a “signing bonus” new drivers and a “transfer bonus” for leaving Uber, lower commissions deducted from their fares, and profit sharing.
“In sinister fashion, it set out to acquire drivers who could continue working for Uber and Lyft except promote Juno to Uber and Lyft customers in the process” the complaint states.
Razzak calls that “a series of blatant falsehoods in the chase of a hundred-million-dollar buyout offer. “
He also sued Juno’s founder and CEO Talmon Marco, Vulcan Cars LLC, and Gett.
After Gett bought Juno in April, Juno “swiftly and resolutely turned their back on driving partners” and extinguished their shares for no value or for “de minimis cash consideration,” a fraction of what Juno already owed them, according to the complaint.
It adds: “(A)lmost all had acquired shares in the company. Many had opted to accept $100 in shares of Juno instead of $100 cash as a sign-up bonus when being a top-rated driver who switches from Uber or Lyft to Juno. But those shares turned out to be worthless.”
Juno also miscalculated its own commissions based on net fares, which include taxes and ancillary fees, though its agreements with drivers said the drivers would not bear any part of the costs, Razzak says.
The 29-page complaint cites a Bloomberg news report that the cash payouts to drivers ranged from $100 to $251 for Juno drivers who worked more than 50 hours a week for the past six months. “Even if Juno had given $250 to every driver who was active as of February [2017], that would amount to about 1.5 percent of the company’s valuation from the sale,” the complaint states, directly quoting Bloomberg.
The drivers seek class certification and compensatory and punitive damages for securities fraud, false advertising, breach of contract, breach of faith, fraudulent misrepresentation and conversion.
Representatives for the defendants did not immediately respond to requests for comment.
The plaintiffs are represented by Mohammed Gangat in New Hyde Park.
Follow @jruss_jruss
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
