Uber and Lyft plan to grant cash bonuses to some of their drivers so that they can then use this cash to buy shares in the respective IPOs of both companies, according to a new report by The Wall Street Journal.
It is a complex workaround to a unique problem faced by ridesharing companies, who can not assign actions to their drivers due to rules of the Securities and Exchange Commission that prevent the allocation of shares of private companies to subcontractors, who, technically, are not considered full-time employees. employees under the law. And although the SEC has asked companies to indicate whether or not to change this rule, it is unlikely that, even with the support of Uber, Lyft and Airbnb, these changes will happen in time.
By giving drivers cash bonuses with the option of using them in shares, drivers can also choose to simply keep the money. Uber and Lyft offer drivers the opportunity to invest in (and reap a portion of the profits, if any) the company at IPO prices without directly granting them stock.
It is said that the two programs differ from one company to the other. Lyft (which plans an IPO in March) has the simplest plan of the two. Drivers who made 10,000 trips will receive $ 1,000, either in cash or IPO priced shares, while drivers with more than 20,000 trips will receive $ 10,000. Since neither company has yet officially announced its bonus programs, it is quite possible that plans will change.
Uber (whose IPO is expected soon after Lyft's) would invest hundreds of millions of dollars in the program, which would give "an important part" of the drivers either a cash bonus or the opportunity to use them to buy shares during the IPO. price. The premiums will apparently be ranked according to the working hours of the drivers with Uber and the number of trips they have made, although no details are yet given as to how much individual drivers can expect to receive.
The fact that carpool drivers are not considered full-time employees is a controversial debate in recent years, as stock options are only one of the issues involved. Several lawsuits have tried to classify drivers as full-fledged employees, although the courts have largely ruled in favor of Uber and Lyft to keep drivers as independent contractors for the company. 39; instant. In addition, Uber, for example, began rolling out a program offering rewards to drivers, including free tuition at the university and higher incomes.
Lyft declined to comment when asked about the new program; Uber had not yet responded to a request for comment at the time of publication.