Uber and Lyft plan to offer their drivers shares in their IPOs



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(Reuters) – Uber and Lyft plan to offer cash bonuses to some of their most active drivers, with the option of acquiring shares in the much awaited Wall Street debut of stimulus business, which is a bold effort to improve relationships between drivers as companies move to public markets.

Both programs will give drivers who have traveled the longest route and traveled the most kilometers traveled by companies the rare opportunity to buy shares in the initial public offering, before the shares begin to trade. on public purses, according to four knowledgeable sources. Such transactions are not normally available to retail investors.

This is Uber's and Lyft's latest offer to improve relations with drivers who have long disputed their classification as independent contractors and who they claim are low wages and inadequate treatment for the job. share of companies. Both companies still face thousands of arbitration claims regarding their professional status.

Lyft plans to give drivers who have made at least 10,000 trips on the platform $ 1,000 that can be held as a cash bonus or used to buy shares of the IPO, said the company. one of the sources Thursday. This plan aims to reward the most active and older drivers, who do not enjoy any social benefits such as health insurance and reimbursement of expenses.

A driver who has made 20,000 trips would qualify for $ 10,000 in cash or an amount equivalent to shares, said the person. We did not know how many pilots would qualify, but the program is not limited.

Many drivers in urban areas like San Francisco and Los Angeles use Uber and Lyft, and some could benefit from both storage programs.

The Wall Street Journal announced for the first time Thursday the share ownership plans of Uber and Lyft drivers.

Lyft plans to launch its "roadshow," when the company will invite potential investors to buy shares of the offer, the week of March 18, reported Reuters last week. The roadshow is expected to last about two weeks, likely making Lyft the first Wall Street film launched by a group of high-value companies backed by venture capital companies, all of which should be made public this year.

Uber and Lyft both confidentially requested an initial public offering in December. Lyft is expected to release its regulatory documents this week and will likely contain details on the driver-related reward program.

Uber, Lyft's much larger rival, still needs several weeks to prepare for his IPO. The company is developing the details of a large driver program that would give a significant portion of its 3 million active drivers and couriers worldwide a cash bonus that they could use to buy shares at the IPO price. , according to three people. with knowledge of the subject.

The stock program will be much more complicated than Lyft's, because it involves many more drivers and countries with different securities laws, and it will cost millions of dollars, said one of them.

For drivers of overseas markets where securities laws will prohibit them from buying shares, keeping their money will be their only option, added another source.

Cash bonuses will be spread on a sliding scale based on the length of the driver's service and the number of trips or deliveries, said this person. The number of goals and the target date for achieving these goals are still under development and will be defined prior to the IPO.

The stock price often appears after the start of trading, making it a lucrative payday for shareholders who are able to buy at the IPO price. However, many drivers will probably keep the cash, said Harry Campbell, creator of the blog and podcast Ridehare Guy, which offers advice to drivers.

"Most drivers have a pretty tight budget, so I think it will be tempting to take the cash bonus," he said.

Last year, Uber sent a letter to the US Securities and Exchange Commission requesting a rule change so that the company could assign shares to drivers while it was still private. Such programs had been problematic in the past. The Juno start-up, based in New York, promised equity to drivers, which drew the SEC's attention. Juno ended up canceling the equity program after its acquisition, causing a lawsuit against the drivers.

Lyft expects its IPO to be between $ 20 billion and $ 25 billion, up from $ 15 billion today. Uber is seeking a valuation that could reach $ 120 billion, against $ 76 billion in the private market.

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