Uber drivers offered 3 percent of IPO shares

• With Uber’s high-profile IPO looming, about a quarter of its drivers stand to get a piece of the stock offering.
• 5.4 million shares, or about 3 percent of the total offering, will be reserved for drivers.
• Still, relations between the ride-hailing company and its drivers are contentious, and a strike is planned for May 8.

More than 1 million of Uber’s 3.9 million drivers across the globe will have the option to purchase up to 5.4 million shares — or 3 percent — of the ride-hailing company’s common stock when it goes public later this week. Uber founder and CEO Travis Kalanick — the largest individual shareholder — by comparison owns 8.6 percent of the company’s shares. Any shares not purchased under its “Underwriters–Directed Share Program” will be offered to the general public, Uber said in an SEC filing last month. 

Qualified drivers are also eligible for a one-time monetary reward of up to $10,000, depending on a worker’s tenure and number of trips delivered for the company. To qualify, drivers must have completed at least 2,500 trips before April 7, including at least one in 2019. They must also be in good standing. 

Uber has long had a contentious relationship with its drivers — who are classified as independent contractors, rather than employees. The company acknowledges the advantages this distinction, which is being challenged, affords the company. 

“We believe that Drivers are independent contractors because, among other things, they can choose whether, when, and where to provide services on our platform, are free to provide services on our competitors’ platforms, and provide a vehicle to perform services on our platform,” the company said in its SEC filing. It acknowledged that its “business would be adversely affected if Drivers were classified as employees instead of independent contractors.”

Strike plans

Drivers — and the unions that represent them — argue that Uber executives are getting rich off of their hard work while the drivers struggle to make ends meet. They’re planning to strike on Wednesday, May 8, ahead of the planned IPO. 

Uber, Lyft, and other drivers of ride-hailing services who are members of the New York Taxi Workers Alliance will strike from 7 a.m. to 9 a.m. and will rally outside of the companies’ headquarters in Long Island City to fight for livable incomes. 

They’re fighting to end “unfair deactivations” that result in a driver’s inability to seek work on the app, to earn livable incomes and to get a guarantee that they’ll take home 80 percent to 85 percent of the customer’s fare. Uber increased the amount it takes from each ride from 20.5 percent in 2017 to 21.7 percent in 2018, Wedbush Securities said in a note. 

“Wall Street investors are telling Uber and Lyft to cut down on driver income, stop incentives, and go faster to Driverless Cars,” NYTWA Executive Director Bhairavi Desai said in a press release. “Uber and Lyft wrote in their S 1 filings that they think they pay drivers too much already. With the IPO, Uber’s corporate owners are set to make billions, all while drivers are left in poverty and go bankrupt.”