The fierce competition between rival ride-sharing services Lyft and Uber is revving up for a battle in the courtroom.
In a complaint filed with the San Francisco Superior Court on November 4, 2014, Lyft alleges that former Chief Operating Officer Travis VanderZanden breached his confidentiality agreement and fiduciary duties when he joined Uber after leaving his post at Lyft.1
VanderZanden joined Lyft—a transportation technology company most recognized for its pink-mustached vehicles—a year-and-a-half ago when Lyft acquired the team at Cherry, an on-demand car wash startup.2 He was named COO of the company and helped the pink-mustached vehicles expand into new cities across the country.3 VanderZanden exited Lyft in August of 2014 and was named Vice President of International Growth by Uber in October.4
According to Lyft, before VanderZanden left the company he copied confidential documents containing financial projections and product plans to his personal Dropbox account.5 By doing so he breached the confidentiality agreement he signed at the time he joined the company.6
In the timeline of events presented in the complaint, VanderZanden told Lyft’s founders of his plans to resign from his position on August 12, 2014, and they planned to discuss the resignation on August 15. VanderZanden later cancelled the meeting, however, and proposed that they reschedule for after the weekend.7
According to Lyft, VanderZanden transferred emails and confidential documents to his personal devices and Dropbox account before returning his computer to the company.8 The complaint alleges that “computer forensic evidence” proves that he synced his Lyft laptop with his personal Dropbox account, accessing 98,000 documents—“a significant number” of which were “Lyft’s most sensitive documents.”9 Such documents found in VanderZanden’s personal Dropbox include financial information, strategic planning materials, product plans, international growth documents, and private information about Lyft’s employees.10
VanderZanden vehemently denies the allegations against him and has tweeted his defense: “Lyft’s PR has lost it, the allegations in their complaint are ridiculous.”11. He claims that he has not taken any confidential data to Uber by stating, “Like many other early employees at Lyft, I used my personal dropbox to collaborate on files. After leaving Lyft and before joining Uber, I realized [Lyft] hadn’t revoked my invites [to the files], so I deleted all remaining files myself.”12
Lyft also claims the confidentiality agreement required VanderZanden to certify that he would continue to honor the agreement through a termination certification. However, the company alleges that he refused to sign that agreement and to return confidential information post-employment upon his departure from the company.13
Further, Lyft alleges that VanderZanden violated a non-solicitation clause in the confidentiality agreement by recruiting Lyft employees to join him at Uber. Lyft’s VP of Operations, Stephen Schnell, joined Uber in late October, and Lyft believes that Ryan Fujiu, its product lead for user growth, is also joining Uber.14
Lyft’s lawsuit seeks an injunction requiring VanderZanden to return the confidential materials to Lyft, as well as unspecified damages and an award of lost profits.15
This claim between the ride-sharing rivals is unlikely to be resolved for many months. In the meantime, however, it seems certain that the intense competition between Lyft and Uber, which has involved undercut prices, competitive promotions, and poached drivers – just to name a few tactics—will continue to pick up speed.16
Ryan Lawler, Lyft Accuses Former COO of Stealing Confidential Documents Before Joining Uber, TechCrunch (Nov. 5, 2014), http://techcrunch.com/2014/11/05/lyft-sues-travis-vanderzanden/. ↩
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Douglas MacMillan, Lyft Alleges Former Executive Took Secret Documents with Him to Uber, Wall St. J. (Nov. 5, 2014, 6:25 PM), http://blogs.wsj.com/digits/2014/11/05/lyft-alleges-former-executive-took-secret-documents-with-him-to-uber/. ↩
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Lawler, supra note 1. ↩
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Catherine Clifford, Lyft Says Former COO Took Confidential Files with Him to Uber, Entrepreneur (Nov. 6, 2014), http://www.entrepreneur.com/article/239453. ↩
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Lawler, supra note 1. ↩
Ellen Huet, Lyft Sues Former COO for Stealing Company Secrets Before Joining Uber, Forbes (Nov. 6, 2014, 1:08 PM), http://www.forbes.com/sites/ellenhuet/2014/11/06/lyft-sues-former-coo-for-stealing-company-secrets-before-joining-uber/. ↩
MacMillan, supra note 4. ↩
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