Uber, Lyft to offer some drivers stock in upcoming IPOs: Report
Uber and Lyft are both upping the ante ahead of their highly anticipated initial public offerings by giving some of their most committed drivers a piece of the action.
According to The Wall Street Journal, which cites people familiar with the matter, both ride-hailing companies are planning to give some of their most-active or longest-serving drivers a cash reward with an option to buy IPO shares.
The rare move would grant drivers access to two of the biggest IPOs this year, as Uber is rumored to be eying a $120 billion valuation while Lyft is targeting around $20 to $25 billion at its debut, according to reports.
While both companies are still working out the details of their programs, Uber is expected to give out the awards based on a sliding scale related to the driver’s length of service and number of trips or deliveries, according to the report.
What’s more, Uber is also aware that many drivers may not be able to buy shares due to securities laws, so those workers are expected to qualify for a cash incentive. Morgan Stanley, who is leading Uber’s IPO, is managing the program, the sources noted.
Meanwhile Lyft is giving out incentives to drivers who have logged the most rides and who have helped build the platform through the years.
For example, a Lyft driver who has logged 20,000 rides would be eligible for $10,000 in cash or that equivalent amount of stock, the report said. However, those who have logged below that at around 10,000 would only be eligible for $1,000 cash or stock award. Lyft sources said it only expects a minority of its drivers to be eligible.
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The move is the latest incentive for the rivals to keep drivers as criticism grows that workers operate as contractors, not employees of the companies.
Uber and Lyft did not immediately respond to FOX Business' request for comment.