What happens when companies like Uber & Lyft go public?

Here is an interesting article that I found discussing what happens when companies like Uber and Lyft take their companies public.  Uber/Lyft rely heavily upon drivers for their success and  companies often time reward their employees for their success with stock options.  Uber/Lyft drivers, however, are considered “independent contractors” so the question is whether these companies would reward their independent contractors with these stock options.  According to the article, Uber is working with the SEC on this issue.

2 thoughts on “What happens when companies like Uber & Lyft go public?

  1. It’s nice that these companies are considering offering stock options to their independent contractors. But I imagine there will be a huge host of problems right off the bat, including the ones mentioned in this article. For instance, how will these companies determine how to quantify the number or type of stocks to give to the independent contractors? What if a driver, like Escobar, is working concurrently for Lyft, the main competitor for Uber? Will the companies have to divide their shares based on a loyalty system? that could require analyzing travel logs of all drivers to see which company they’ve worked for most.

    If Uber and Lyft are so concerned about retaining their driver workforce, they might be better of just increasing the base pay and adding more driver loyalty programs (right now new drivers get a $500-1000 bonus as long as they complete 60 trips in a given period of time. Uber/Lyft could consider adding programs like this for loyal drivers.

  2. Annie, great article. Though there would likely be problems with implementation, it would be considerate sentiment to offer stock options. I agree with Nathan that Uber/Lyft could offer an alternative, like loyalty programs. On an Uber ride, I am aware that on certain days, if drivers drive a certain amount of people, they get bonus credit. With more immediate incentives, I think the goal of retaining their drivers could be achieved.