Uber Warns in IPO Filing That Its Drivers Will Be Even Less Happy
A plan for cash bonuses is unlikely to paper over tensions around its business model.
A demonstrator holds by a sign that says "Booo The Gig Economy" during a march, supporting gig-economy workers, to the Court of Appeal in London, U.K., on Tuesday, Oct. 30, 2018. James Farrar and Yaseen Aslam, Uber drivers spearheading an employment lawsuit, say they should be classed as the company's "workers," meaning they’re entitled to the minimum wage and vacation pay.
Photographer: Simon Dawson/BloombergUber drivers have complained over the years that they’ll get nothing when the company goes public, generating a windfall for its already-wealthy stockholders. That’s not entirely true. In a filing Thursday for its upcoming initial public offering, Uber Technologies Inc. said it would pay $300 million in cash bonuses, or what it calls “driver appreciation rewards.” About 1.1 million drivers will receive the payments in a couple weeks, with some in the U.S. getting as much as $10,000 each.
It’s a number that seems smaller than it may first appear. The total payout equates to less than 0.5 percent of the company’s value, as measured by its last private valuation. On average, an eligible driver will get about $273. They will be able to use that cash to buy stock at the IPO price. Lyft Inc., the main alternative to Uber in the U.S., also offered cash bonuses to drivers who had completed more than 10,000 rides and said it was reserving a portion of the shares in its IPO for them to purchase.