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Report: Uber, Lyft Will Help Drivers Become Shareholders

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Report: Uber, Lyft Will Help Drivers Become Shareholders

Ride-hailing rivals Uber Technologies and Lyft are gearing up to go public and are pursuing ways for their drivers to participate in the planned IPOs, The Wall Street Journal reported.

What Happened

Uber and Lyft are looking to reward some of their most active or longest-serving drivers with a cash bonus that could be used to buy shares in the upcoming IPO, sources close to the matter told WSJ. The unusual move would reward drivers with access to buy the stock before it's listed on an exchange — an attractive opportunity unavailable to the vast majority of ordinary investors.

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Why It's Important

Uber has been exploring ways to reward its drivers since at least 2016, but was unable to do so, as existing securities laws make it difficult to give independent contractors shares of a private company, WSJ said. Uber now has an opportunity to hand out hundreds of millions of dollars to its drivers and couriers across the world, the report said. The amount each driver receives would be based on a tiered program or sliding scale, and the driver could opt to receive cash instead of buying stock.

Lyft drivers who have completed at least 10,000 rides could receive $1,000 in cash that could be used to buy stock. Drivers that have completed 20,000 rides could receive as much as $10,000 in cash or stock, WSJ said. 

What's Next

Lyft is expected to release its IPO paperwork Friday, which is likely to include its reward plans. Uber is expected to go public in May or June, so its paperwork won't be released in the immediate future. 

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Photo courtesy of Uber. 

Posted-In: Lyft ride hailing Uber WSJNews IPOs Media Best of Benzinga

 

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