Ride-Sharing Company Announces Data Breach; State Attorneys General Launch Investigations
On November 21, a ride-sharing company disclosed via press release a 2016 data breach that exposed the personal data of 57 million riders and drivers. According to the company, an outside forensic investigation revealed that in October 2016 hackers obtained approximately 600,000 driver names and license numbers, along with rider names, email addresses, and mobile phone numbers. The company claimed that hackers did not obtain driver or passenger social security, credit card, bank account, birth date, or trip location information. Though the company stated that it has taken action to address the delay in notifying affected individuals and regulators, lawsuits filed by the State of Washington and the City of Chicago claim that the company capitulated to hackers’ demands and “paid the hackers to delete the consumer data and keep quiet about the breach.”
According to a letter from the company to the Washington attorney general attached to the state’s complaint, the company “is taking personnel actions with respect to some of those involved in the handling of the incident.” The company further stated that it has “implemented and will implement further technical security measures, including improvements related to both access controls and encryption.”
According to sources, three separate class action lawsuits have been filed against the company as a result of the 2016 breach (see here, here, and here) and five attorneys general (New York, Illinois, Connecticut, Massachusetts, and Missouri) have launched investigations.
The 2016 data breach follows a settlement in January of that year with the New York Attorney General related to allegations that the company failed to promptly disclose a 2014 data breach. The 2014 data breach involved an alleged failure to prevent unauthorized access to the company’s consumer and driver data maintained on a third-party cloud service provider. As previously reported in InfoBytes in August, the company reached a settlement with the FTC related to the 2014 data breach; however, that settlement was entered into before the company disclosed the existence of the 2016 breach.
In a related development, on November 27, the U.S. District Court for the Northern District of California dismissed without prejudice a putative class action lawsuit against the company related to the 2014 data breach. The court held that the driver’s name, license number, and limited banking information disclosed in the breach was not the type of personally identifiable information that could expose plaintiffs to the risk of identity theft. Accordingly, the court dismissed the case for lack of Article III standing. The court also granted plaintiffs a final opportunity to amend their complaint to address the standing deficiencies.