(Reuters) – Ride-hailing firms Uber and Lyft plan to offer cash bonuses to some of their most-active or longest-serving drivers and the option to put them into shares from their stock market launches, the Wall Street Journal reported on Thursday.
FILE PHOTO: Uber’s logo is displayed on a mobile phone in London, Britain, September 14, 2018. REUTERS/Hannah Mckay/File Photo
The newspaper said Uber Technologies Inc was planning such awards for a “significant” portion of its 3 million drivers, with the costs likely to run into hundreds of millions of dollars.
Under Lyft Inc’s plans, drivers who have completed at least 10,000 rides on the platform will get $1,000 and those who have logged 20,000 rides as much as $10,000, the paper said.
They would then be able to use the money to buy shares at the initial offer price in the company’s IPO widely expected to happen this year, the Journal quoted people familiar with the matter as saying.
The terms mean only a minority of Lyft drivers will qualify, the report said.
Both Uber and Lyft declined to comment.
A number of media outlets have reported over the past two years that Uber was looking at giving shares to drivers but has faced resistance from regulators because they are classed as contractors rather than employees.
Wall Street analysts have estimated Lyft could be valued at between $20 billion and $30 billion in the IPO, and Uber at around $120 billion.
Shares in high-profile companies often surge immediately after debuting, offering those who subscribe for the first round of shares the chance of a bigger payday.
Lyft’s roadshow is expected to launch during the week of March 18, while Uber still needs several more weeks for its IPO preparation, Reuters had reported earlier this month.
Lyft gained traction in the United States after a spate of scandals surfaced at Uber in 2017, including sexual harassment allegations. Several users and drivers switched to Lyft from Uber at the time, after a #DeleteUber campaign trended on social media.
Uber has since introduced a slew of measures to improve its image following accusations of poor driver vetting that led to the sexual harassment incidents.
With an aim to improve its often contentious relationship with drivers, Uber launched a program in June 2017 that included a new navigation system, fairer approach to review performance and an option for passengers to tip drivers.
Reporting by Aparajita Saxena in Bengaluru; Editing by Patrick Graham and Saumyadeb Chakrabarty