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Lyft will pay some of its drivers cash bonuses of up to $ 10,000 before the company's next IPO – an unusual benefit for some of the independent contractors who play a vital role in the company's business model .
Drivers who receive a bonus will have the opportunity to place this money in the shares of the company.
Lyft detailed the program in the IPO documents filed on Friday. It generates up to $ 100 million in its public offering,
beat the competitor Uber at the punch.
The bonus program will provide unique cash rewards for "recognizing drivers who have contributed to our success". Drivers can use these bonuses to buy stock in his "Directed Stock Program" when the company goes public. Drivers being independent contractors, they would not generally qualify for such a program, unlike some employees, investors and board members.
Starting February 25, 2019, drivers will be rewarded for crossing milestones. Drivers who have completed at least 20,000 races on that date will receive $ 10,000 and drivers with between 10,000 and 20,000 rides, $ 1,000.
Money will also be reserved for pilots who have sat on the advisory board of the company 's drivers. They could get $ 1,000. (If a driver is eligible for multiple cash bonuses, he will receive the largest payment.)
This is a pledge of goodwill for drivers who are indispensable to the core business of the company. It also sets a precedent for rival Uber, who is also expected to be released this year.
Uber is working on its own program to distribute cash bonuses to some drivers, with the possibility of placing this money in shares, according to a source close to the record. It also plans to take a multi-level approach, awarding bonuses to drivers based on different travel thresholds, the source said.
San Francisco-based pilot Jay Cradeur says he is eligible for $ 1,000 because he has already made 14,000 trips. He plans to use his bonus to buy shares of the company "just for laughter".
"It's money that I did not expect.Let's see if and when will happen the IPO.If this is the case, it will be a day more interesting, "said Cradeur.
Some experts are already worrying about the move, suggesting that it could be an olive branch intended to alleviate a potential public relations nightmare about how the company is doing business. company treats its drivers.
"I see this as an effort to stave off negative publicity when they will be most vulnerable to advertising," said Thomas Kochan, told CNN Business, a professor at George Maverick Bunker at MIT Sloan School of Management.
Kochan told CNN Business that it was "clear" that Uber and Lyft were worried that drivers were using IPO deposits as "an opportunity to make their voices heard and ask in what way it will be beneficial to them ".
"I do not think it will be enough to silence the growing number of drivers and organizations starting to organize and demanding better treatment and more equitable sharing of the gains that they contribute. to produce, "he added.
The ability to attract and retain drivers is critical to the success of businesses going to work.
In his
deposit,
Lyft mentioned: "We believe that our ability to compete effectively depends on many factors beyond our control and beyond our control, including … our ability to attract and retain qualified pilots and pilots."
According to Harry Campbell, author of the blog The RideShare Guy and hailstormer driver, reaching 10,000 journeys "is a job for Lyft".
"It seems that the Lyft cash bonus will primarily reward the full-time or highly experienced drivers, which is fair," he said, adding that he expected the Cash rewards are primarily aimed at San Francisco pilots and those from other major cities.
Bhairavi Desai, executive director of the New York Taxi Workers' Alliance, suggested that a one-time cash bonus would not help for the vast majority of drivers.
"Uber and Lyft have built their business model from the sweat of drivers, paying the vast majority of New York City drivers less than the minimum wage in their efforts to become public," Desai said in a statement. "Now, instead of increasing wages in anticipation of their profits, they only want to offer shares to a small minority of drivers?"
While Lyft has long been considered the most user-friendly alternative to Uber, its image has been tested in recent months.
L & # 39; Company
filed a complaint
Against New York City just days before the coming into force, on February 1, of a minimum wage law, the first of its kind, Lyft argued that the the compensation is wrong and unfairly benefits Uber.
Veena Dubal, an expert in labor law, feared that drivers with equity in the company could change the dynamics.
"I fear that giving actions to drivers could also hinder the unionization of the self-employed, as they engage in a different way for the well-being of the company – not for their own sake. immediate well-being, "said Dubal, a law professor associated with the University of California. "As a result, I am skeptical that these actions will generate compensation in the short or long term."
Lyft says that eligible drivers will be paid by March 19 or will be able to use the bonuses to buy shares as part of their IPO.
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