When Juno first hit the streets of New York City, drivers were drawn in by the the ride-hail platform's promise of benefits and company shares. Now that the startup has hit the breaks, drivers are fighting to cash out fair and square.
CNBC reported today that a group of Juno drivers has filed a federal class action suit against the ride-hail company over its now defunct driver equity program, which allowed drivers who worked more than 30 hours a week for the startup to earn restricted company shares. Filed by three Juno drivers, who say they and others were lured to work for the startup by its promise of driver equity, the suit alleges breach of contract, securities fraud, and false advertising by the company.
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In April, the NYC-based ride-hail company was acquired for $200 million by rival Gett, which has been looking to expand its successful European base into U.S. streets. At the time, Juno's equity program was ended, and drivers who had accumulated company shares were notified by email that they would be automatically cashed out.
As Recode reported in April, however, the payouts didn't pass muster for many drivers. Regardless of how many shares they'd accumulated, according to Recode, drivers have been receiving payments of approximately $100, whether it was for a few hundred shares or several thousand.
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According to CNBC, the class action states, "As part of the [Gett buyout] announcement, Juno announced that drivers who had received shares in the Company would either: have those shared extinguished with no compensation, or receive an amount per share to be determined based on each driver, with each share not being valued the same, and being valued by Juno with no disclosure of the method of valuation."
It continues, "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."
The race to dominate the ride-hail industry has caused plenty of internal and external turmoil, including over its methods of recruiting workers. In January, the Federal Trade Commission fined Uber $20 million for misleading drivers over the amount they could expect to make working for the startup, and how.
Following its acquisition by Gett, Juno will continue to operate in New York for the time being, known as Juno by Gett. Co-founded late last year by Talmon Marco, who previously co-founded Viber and flipped it for $900 million, the ride-hail startup was advertised as a driver-friendly alternative to Uber and Lyft, which have struggled with turnover as driver competition has skyrocketed and wages have fallen.
Juno was reached out to for comment.
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