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Lawsuit claiming Uber hid Dutch tax haven is dismissed by US judge

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LA Post: Lawsuit claiming Uber hid Dutch tax haven is dismissed by US judge
May 15, 2024
Jonathan Stempel - Reuters

By Jonathan Stempel

(Reuters) - A U.S. judge has dismissed a proposed class action lawsuit accusing Uber Technologies of defrauding shareholders by concealing its use of its Netherlands subsidiary as a tax haven.

The case stemmed from the July 2022 release of the Uber Files, based on former lobbyist Mark MacGann's whistleblower claims that Uber broke laws and secretly lobbied politicians to expand its ride-sharing operations into new markets.

Uber's share price fell 5.1% on the next trading day, wiping out more than $2.2 billion of market value.

But in a Tuesday decision, U.S. District Judge Rita Lin in San Francisco found no proof Uber made false statements, and said Chief Executive Dara Khosrowshahi acknowledged that taxes were one reason Uber based its European operations in Amsterdam.

Shareholders said Uber should have disclosed that former Chief Executive Travis Kalanick had in 2015, two years before his ouster, authorized a "kill switch" to block European investigators from reviewing company finances.

They also said Khosrowshahi falsely claimed during Uber's May 2020 annual shareholder meeting that the company based its Europa operations in Amsterdam for personnel reasons.

Lin, however, noted that Khosrowshahi referred multiple times during the annual meeting to the tax benefits.

"Considered in context, Khosrowshahi's statement thus did not affirmatively create an impression of a state of affairs that differs in a material way from the one that actually exists," Lin wrote.

Lawyers for Uber shareholders did not immediately respond to requests for comment on Wednesday. Uber and its lawyers did not immediately respond to similar requests.

The case is Cao v Uber Technologies Inc et al, U.S. District Court, Northern District of California, No. 22-04688.

(Reporting by Jonathan Stempel in New York)

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