Juno Class Action: Company Lured Drivers with ‘Bait and Switch’ Scheme

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Mobile taxi company Juno USA LP offered equity ownership to top-rated Uber and Lyft drivers in New York City but failed to deliver on its promises, according to a class action lawsuit filed last week in New York federal court.

Plaintiffs Mohammed Razzak, Mohammad Siddique and Mohammad Islam claim they have spent years working as drivers in New York City, routinely working 50 to 60 hours per week. They have worked as drivers for a variety of companies, including Uber and Lyft, the Juno class action lawsuit states.

Several years ago, Juno was established as a competitor to Uber and Lyft. The Juno class action lawsuit describes the company’s strategy as “both simple and brilliant”—to acquire drivers who already have the right experience and credentials to operate as a mobile taxi driver in New York City.

“And, 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 Juno class action lawsuit says.

To entice drivers to work for Juno, the company “offered a very appealing carrot”: a promise of equity ownership in the company. This strategy was effective, and Juno’s start in New York City was like the beginning of a “modern day startup fairy tale,” the plaintiffs allege in the Juno class action lawsuit.

Top-rated drivers began driving for Juno, and the company was able to enter the competitive mobile taxi market in New York City. The company quickly sold itself for $200 million, according to the Juno class action lawsuit.

Nearly all of the Juno drivers had opted to accept $100 in shares of the company instead of a $100 sign-up bonus, the plaintiffs say. However, these shares were basically worthless because Juno ended the practice of granting equity shares to drivers.

“Existing shares were either extinguished for no value, or extinguished in exchange for de minimis cash consideration—an amount representing a fraction of what they were owed had Juno honored its agreements,” the Juno class action lawsuit says.

The plaintiffs allege the drivers 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 plaintiffs filed the Juno class action lawsuit on behalf of themselves and all other persons in the United States who worked for Juno. They also seek to represent three subclasses.

The first proposed subclass will consist of Class Members who worked as Juno drivers and received restricted stock units (RSUs). The second will consist of Class who chose to receive $100 in RSUs instead of $100 in cash. The third subclass will include Class Members who referred drivers to Juno but did not receive the benefits Juno promised for referrals.

The Juno class action lawsuit asserts claims for false advertising, breach of contract, breach of the implied covenant of good faith and fair dealing, conversion, misrepresentation, and shareholder derivative claims. The plaintiffs seek monetary damages, restitution and injunctive relief.

The plaintiffs are represented by Mohammed Gangat of Law Office of Mohammed Gangat and Philip M. Hines of Held & Hines LLP.

The Juno Drivers’ Class Action Lawsuit is Mohammed Razzak, et al. v. Juno USA LP, et al., Case No. 1:17-cv-04373, in the U.S. District Court for the Southern District of New York.