Rideshare drivers' association took $60K in misspent member fees: Lawsuit

MINNEAPOLIS (FOX 9) - Drivers who sought to be collectively represented by the Minnesota Uber/Lyft Drivers Association (MULDA) as they worked for approval of higher guaranteed wages by rideshare companies such as Uber and Lyft are saying in a lawsuit that more than $60,000 in membership fees from the drivers they claimed to represent were misused.

What we know

As part of the complaint filed in Hennepin County, six people who were MULDA members are now seeking so-far unspecified damages, alleging consumer fraud, deceptive practices, and a court order to prevent MULDA from seeking additional payments from the public in exchange for membership.

Each plaintiff in the lawsuit – Farhan Badel, Mohamed Bulle, Mustafa Abdile, Ahmed Mohamed, Ahmed Igale and Dawit Kassa – either currently, or drove for Uber or Lyft in the past.

According to the lawsuit, in June 2022, drivers each contributed $200 to become MULDA members.

In July 2022, a MULDA website was created, with its mission being, "An association of drivers for various app-based companies that promotes fairness, justice, and transparency in Minnesota personal transportation industry." As part of the MULDA website, a "membership" section further solicited donations from prospective drivers seeking to join.

In July 2022, a MULDA event was held and attended by nearly 500 drivers, during which MULDA’s "drivers’ committee" collected contributions from more than 280 people who wanted to become members, the lawsuit says.

Rideshare drivers often picketed at the Minneapolis-St. Paul International Airport as they continued to fight for guaranteed wages. (FOX 9)

However, in August 2023, the lawsuit claims that Eid Ali incorporated both MULDA and MULDA-RC without the knowledge of the drivers’ committee members. An associate of Eid Ali also incorporated MuldaActionFund, P.A. – a corporation whose connection to MULDA has never been explained, the lawsuit states.

When asked about transfers of money, Eid Ali said that "his name had to be on the account," and that the various companies were for "fundraising purposes."

The lawsuit claims that Eid Ali went on to operate MULDA "without any outside scrutiny into his actions" as drivers began to question a lack of transparency and accountability.

Bulle, Abdile, Mohamed, and Kassa say they were then removed as board members in June 2024 – a move that the lawsuit alleges was coordinated by Eid Ali, and against MULDA bylaws.

In July 2024, Eid Ali brought new MULDA bylaws to a meeting, but the members were not allowed to inspect them, the lawsuit says.

When questioned for copies of the new bylaws on Aug. 8, 2024, Bulle, Abdile, Mohamed, and Kassa were denied based on their previous removal from the board.

The group now alleges that Eid Ali’s incorporation of companies with the word, "MULDA," constitutes a "Deceptive Trade Practice" under Minnesota Law.

Background

In March 2024, the Minneapolis City Council approved a "transportation rideshare worker protection ordinance', overriding a veto by Mayor Frey, that required ride-hailing companies to pay $1.40 per mile and 51 cents per minute to drivers. 

In response, Uber and Lyft threatened to end service in Minneapolis if the ordinance went into effect on May 1, 2024.

The companies countered, backing a rate proposed in a state study on ride-hailing driver wages of 89 cents per mile and 49 cents per minute.

Prior to the end of the legislative session, in May 2024, lawmakers reached a new deal that included $1.28 per mile but only 31 cents per minute.

At that point, Uber and Lyft issued statements, each saying the agreed-upon rate would be enough to keep the companies operating in Minnesota.

The Minneapolis City Council then recalled its ordinance, given that the new law approved by lawmakers would have overridden it.

On May 28, Minnesota Governor Tim Walz signed the legislative agreement into law, enacting the new guaranteed rates for drivers.