Data Points: Privacy & Data Security Blog

Uber Technologies Inc., the internet-based taxi service, was recently hit with a putative class action lawsuit over a data breach involving the personal information of about 50,000 current and former drivers.  Uber develops, markets and operates a mobile app-based transportation network.  Its app allows consumers to submit a trip request that is then routed to crowd-sourced taxi drivers.  In March 2014, a hacker gained access to a database containing the names and driver's license numbers of tens of thousands of Uber drivers.  Uber knew of the data breach as early as September 2014, but provided the drivers no notice until February 2015, five months later.  According to the complaint, the personal information stored in the hacked data-base was not encrypted and was accessible with a single password that was publicly available on the internet.

The plaintiff and putative class representative, Sasha Antman, a former driver from Portland, Oregon, alleges Uber violated California law by failing to adequately safeguard the drivers’ personal information and improperly delayed informing drivers about the breach.  Antman seeks to represent a California and nationwide class, and alleges more than $5 million in damages.   According to the complaint, Antman and other drivers "now face years of constant surveillance of their financial and personal records . . . and loss of rights."  Although Uber claims it has not received any reports of misuse of the information disclosed in the data breach, the complaint alleges that an unknown person used Antman’s private information in June 2014 to apply for a credit card, which now appears on his credit report.

Uber failed twice with respect to data security and privacy – it did not have adequate safeguards in place to protect the personal data of its drivers, and it waited too long to notify the affected drivers of the data breach.  Among other claims, the class action lawsuit against Uber is brought pursuant to a California statute that requires companies to protect any personal information it may have in its possession.  However, it is not only California companies that need to be concerned.  Similar privacy statutes are proliferating nationwide and the potential exists for class action liability even without a statute; claims seeking recourse for data breaches may be brought under common law tort theories, such as negligence, or state constitutions.

The lawsuit against Uber should serve as a cautionary tale for any organization that stores personal data of employees or customers.  First, start with the right protective framework to adequately secure the data and protect it from outside threats, such as hackers.   Adequate protection often begins with a complete security audit of the computer and storage systems.   Second, the response to a data breach should be swift and effective:  immediately investigate the data breach, remedy the vulnerable system that was breached, and promptly notify the affected individuals.   Uber did neither – its simple “security key” for the hacked database was publicly available and Uber compounded the problem when it waited five months to notify the affected drivers of the data breach.   Uber’s offer to provide the affected drivers with one year of free credit monitoring was too little, too late, to avoid the lawsuit.