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Lyft's Messy IPO Gets More Complicated Thanks to Two Investor Class-Action Lawsuits

Lyft co-founders John Zimmer, front second from left, and Logan Green, front second from right, cheer as they as they ring a ceremonial opening bell in Los Angeles.
Lyft co-founders John Zimmer, front second from left, and Logan Green, front second from right, cheer as they as they ring a ceremonial opening bell in Los Angeles.
Photo: Ringo H.W. Chiu (AP)

Lyft’s initial public offering headache just got worse.

Bloomberg reported Wednesday that following Lyft’s initial public offering, which didn’t exactly go super well, the company is now looking at two separate lawsuits from its investors. At the time the company went public last month, Lyft’s shares were initially priced at $72. But shortly after, its share price began to fall—and kept falling—with the company at $58.36 as of Thursday.

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According to Bloomberg, investors allege in their suits—both of which were filed in state court in San Francisco—that Lyft’s claim to 39 percent market share was maybe not quite in line with reality.

The suits also reportedly faulted the company for failing to alert investors ahead of its recent electric bike recall, yet another problem facing the company at present (aside, of course, from ongoing controversy over Lyft’s labor practices).

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A spokesperson for Lyft declined to comment on the lawsuits.

Earlier this week, it was announced that Lyft was pulling its recently acquired fleet of e-bikes from the streets of New York, San Francisco, and Washington amid reports of braking issues, some of which resulted in rider injury.

A spokesperson for Citi Bike, which is operated by Lyft-owned Motivate, told Gizmodo in a statement by email that following “a small number of reports and out of an abundance of caution, we are proactively pausing our electric bikes from service.” The company said it was working to replace electric bicycles in the three markets with regular bikes in the interim to avoid service disruptions.

In short, Lyft’s very bad week just got even more complicated.

[Bloomberg]

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DISCUSSION

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Akinetopsia

Looking at that picture above I really don’t understand what they are celebrating. The [Canadian] company I used to work for and at which I am now currently contracting, while not directly going public itself was acquired and relocated by a [American] publicly traded company.

It sapped the life right out of the business.

Going to work used to be fun, now everyone is miserable. They complain all the time, our work is stifled as our hands are tied as we can’t do anything without filling internal form after form after form in a never ending back and forth with head offices. The technologies we created have fallen into disrepair, affecting the quality of the service. Client satisfaction and revenue have dropped considerably. 75% of the original employees end executives quit, taking with them most if not all of the expertise. The remaining 25% keep talking about quitting as soon as the opportunity arises. Most of a day is now spent documenting and justifying the work we would be doing — if we weren’t actually wasting our time documenting it. As a result employee motivation has fallen to zero and the workplace has turned into a typical drab office filled with Colin Robinsons where nobody cares and does the least amount of work possible.

Shareholders see it as more important to fill their pockets than to let us do our damn work.