Uber IPO: Drivers get cash payouts for long service
Uber on Thursday said it would award one-time cash bonuses to its longest-serving drivers when the ride-sharing company officially goes public.
The company said the payments will be dispersed on or around April 27 in amounts tied to the number of rides each driver completed. Drivers who have completed 2,500, 5,000, 10,000 or 20,000 overall trips will receive $100, $500, $1,000 or $10,000.
“To acknowledge drivers who have participated in our success, we are paying a one-time cash driver appreciation reward to qualifying drivers in jurisdictions where we operate through owned operations, in an aggregate amount of approximately $300 million to over 1.1 million qualifying drivers around the world,” Uber said in its S-1 filing with the U.S. Securities and Exchange Commission.
To be eligible for the payouts, Uber said the drivers must have completed at least one trip through April 7, meet the overall trip benchmarks and be “in good standing” with the company. Uber did not elaborate on its definition of “good standing.”
Aside from the cash payouts, Uber is offering long-serving drivers the option to buy company shares at the IPO price. Only drivers who qualified for the bonuses will be admitted to the share purchase program.
Uber has drawn widespread criticism since its founding over its policy of classifying drivers as independent contractors rather than employees. In its S-1 filing, the company admitted that its business would be “adversely affected” if it re-classified drivers as employees.
Ride-share rival Lyft offered its drivers a similar perk when it went public last month. Through Lyft’s program, payouts were limited to drivers with 10,000 career rides, who received $1,000, and drivers with 20,000 career rides, who received $10,000.
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Uber is expected to seek to raise $10 billion on a valuation of $100 billion when it goes public.