Civil war among rideshare drivers
Max Nesterak of MN Reformer was the first to report on the lawsuit filed by some local rideshare drivers against their own nonprofit advocacy group Minnesota Uber/Lyft Drivers Association (MULDA).
So what? The nonprofit was apparently written into state law as the recipient of a lucrative franchise providing services to rideshare drivers. So, a lot of money is riding on the question of who “owns” the nonprofit.
The nonprofit MULDA played a leading role in the passage of a state law this year regulating rideshare operations in Minnesota and setting a minimum wage for drivers.
The Reformer’s headline:
Minnesota Uber and Lyft drivers accuse advocacy organization of fraud in lawsuit
The Reformer points out:
Under the law passed by state lawmakers earlier this year, transportation network companies like Uber and Lyft must contract with a nonprofit advocacy organization to provide driver services like assistance with onboarding and appealing terminations, which are known as deactivations.
The law seems tailored to describe the Minnesota Uber/Lyft Drivers Association, requiring that the advocacy organization must have been operating for at least two years and be able to provide “culturally competent” driver services.
That “two years” provision is vital, as discussed below. The lawsuit was filed late last week in Hennepin County court. The six driver/plaintiffs name three corporate entities as defendants. Mulda’s founder, Eid Yusuf Ali, age 49 of Edina, is not named as a defendant, individually.
Minnesota Uber/Lyft Drivers Assocation was incorporated in June 2022, more than two years ago. It received its IRS tax-exempt status in December 2023, retroactive to its 2022 founding.
In a court filing in their lawsuit, the plaintiff/drivers allege that:
Minnesota Uber/Lyft Drivers Association collected more than $60,000 from drivers who sought to become Members of the organization.
According to IRS records, only a single tax return for Mulda has been filed, to date. That return covered calendar year 2023 only, and used a report form intended for nonprofits with annual revenue under $50,000.
Mulda lists as its corporate address a multi-tenant commercial building in east Bloomington.
Sharp-eyed readers will recognize the building as having played a significant role in the recent (unrelated) Feeding Our Future court trial.
The other two lawsuit defendants both use the acronym Mulda in their names. Mulda-RC was incorporated on August 11, 2023, with an address given as Ali’s home in Edina.
Just plain Mulda was incorporated the following day (August 12) also giving Ali’s Edina home as its official address.
The Reformer mentions a fourth group, MuldaActionFund, P.A., being formed on September 19 by an Ali associate. That effort is headquartered at a south Minneapolis multi-tenant office building you have also seen before.
The Minnesota Star Tribune also covers the lawsuit in a story published today. The Star Tribune writes:
The suit claims that Ali’s creation of three different nonprofits based on the increasingly prominent advocacy organization — as well as an associate of Ali’s incorporation of a “MuldaActionFund, P.A.” — confused drivers and made them concerned about how the organization was being run. Those drivers created a competing organization called “Mulda Members.”
The Mulda Members nonprofit was incorporated October 19. It’s located a yet another familiar multi-tenant office building in south Minneapolis.
The Reformer’s Nesterak reported on this schism back in October of last year, which gave rise to two or three separate splinter groups.
The Mulda lawsuit is due back in court on September 27.