- Lyft and Uber will both offer some of their drivers cash to bonuses to buy stock in their upcoming IPOs, according to the Wall Street Journal.
- Lyft’s program, the details of which could be revealed in a public filing as soon as Friday, will impact a minority of its driver, who will get cash that they can either keep, or buy shares with at the IPO listing price, according to the report.
- Uber’s program, while similar in style, will likely reach the majority of its 3 million drivers, the report said.
- Unlike full-time employees, Lyft and Uber drivers don’t qualify for equity grants as part of their compensation. However, buying stock at the IPO price will likely give these drivers access to shares at a lower price than if they bought them on their own after shares start trading.
Lyft and Uber will both offer some drivers the option to buy stock in their upcoming IPOs, according to the Wall Street Journal.
Both companies will offer programs that give their most active and dedicated drivers cash bonuses which can be used to buy company stock at the listing price, according to the report. Since many tech IPOs jump in price on the first day of trading, this will likely give drivers the chance to purchase shares at a lower price than if they just bought stocks on the open market after the IPO.
Both Lyft and Uber offer equity as part of their compensation packages for full-time employees. But drivers, while the bread-and-butter of both companies services, are classified as contractors and have not previously been eligible for these benefits.
Lyft, which is expected to publicly file its IPO paperwork on Friday, plans to give $1,000 to drivers who have logged 10,000 rides on its platform, according to the Journal. It’s up to the drivers whether they keep the money or use it to buy shares, and only a minority of its drivers will qualify, the report said.
Drivers who racked up 20,000 rides on Lyft are eligible for $10,000, according to the report.
Uber, whose IPO is expected to happen later this year, is still working out the details of its driver stock program, though it expects to offer some form of bonus to most of its 3 million active drivers, the report said
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See Also:
- IPO WATCH: All the tech startups that have taken steps toward going public in 2019 — and those rumored to be thinking about it
- $1 billion video-conferencing company Zoom is aiming for an April IPO
- Pinterest has reportedly filed for an IPO that could value the company at $12 billion
Source: Business Insider – bpeterson@businessinsider.com (Becky Peterson)