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Drivers for Juno, the two-year-old, “socially responsible” ride-hail startup, filed a class action lawsuit earlier this month against the company and its new owner, Gett. The drivers allege that Juno misled its drivers by promising them equity, a program which was immediately suspended after a rival company acquired Juno for $200 million earlier this year.
“To lure the drivers, Juno offered a very appealing carrot. The promise of equity ownership,” reads the complaint, which was filed by the Law Offices of Mohammed Gangat in New York federal court on June 9. “Once Juno, [CEO] Mr. [Talmon] Marco and the investors had a $200 million offer in sight, they swiftly and resolutely turned their back on Driving Partners.”
According to the complaint, Juno’s strategy for breaking into the New York market was to poach Lyft and Uber’s licensed and experienced drivers by offering them better pay, fairer treatment, and a small equity stake in the company. For Juno's drivers, of whom the lawsuit estimates there are around 20,000,, that offer was compelling enough to sign on. Many drivers who signed on with Juno, the complaint says, accepted “$100 in shares of Juno instead of $100 cash as a sign-up bonus.”
This deal was also compelling to customers who, the complaint alleges, were drawn to the idea of using an app that was “owned by the drivers itself and not a handful of founders and investors.”
In the app store, Juno describes itself as a “new approach to ride sharing.” “Juno treats drivers better. Drivers treat riders better. Happy drivers, happy riders,” the copy says.
But when Juno told drivers via email in April that Gett had acquired it, most found out their payout would be between just a hundred to a few hundred dollars, despite having allegedly worked 50 to 60 hour weeks on Juno in hopes of earning additional shares in the company. In addition to the stock options some drivers received when they signed up, they were also eligible to earn more equity as long as they drove more than 120 hours per month. “Juno even went so far as to promise that equity would be treated the same in terms of dilution and distribution rights in the event Juno was ever sold or conducted an initial public offering,” the complaint alleges.
“The drivers were understandably outraged,” at having been “duped” by Juno’s “blatant falsehoods,” the suit says. “Plaintiffs were victims of the classic “bait and switch” scheme – promised equity and then paid off at pennies on the dollar when all other shareholders/investors made out handsomely.”
Juno presented itself as a contrast to other ride-hail companies like Uber and Lyft, which have become renowned for classifying drivers as contractors, low pay, errors that cost drivers, and general manipulation of their workers.
But now, Juno is accused of misleading drivers, and enticing them with false promises of big earnings — an accusation Uber has also faced. In fact, Uber agreed at the beginning of the year to pay $20 million to settle a suit brought by the FTC in which the agency accused Uber of misleading drivers about possible earnings.
When ride-hail drivers for other on-demand economy companies have filed class action lawsuits against Lyft and Uber, the majority of those cases were forced into arbitration because the workers had agreed to arbitration when they initially signed their contracts. Juno drivers also signed to arbitration agreements, but an attorney with one of the firms representing the drivers said his team would be challenging the enforceability of that agreement.
Mohammed Razzak and Mohammad Islam, two of the named plaintiffs in the suit, are suing Juno for “intentional misrepresentation.” In addition, as a class, the drivers are bringing a shareholder derivative claim against the company, for selling itself to Gett without appropriately considering what would be best for the shareholder drivers. Also included in the complaint is a securities fraud claim, which the plaintiffs bring against Juno for offering drivers stock options via a program that didn’t have approval from the Securities and Exchange Commission. Prior to its acquisition, Juno told drivers that it was under scrutiny from the SEC; it’s possible the drivers’ shares would have been void regardless of Gett’s acquisition.
“We are very disappointed in Juno and Gett for the way they have treated us and all of the other drivers,” said Mohammad Siddique, a third named plaintiff in the suit, in an email statement. “We were mislead by the company into thinking we are shareholders, and we worked very hard to help build the company. We thought we were taking part in the American Dream. We need this to be corrected and we need justice.”
Juno’s CEO, Talmon Marco, did not immediately respond to request for comment on this story.