Uber and Lyft are both due to go public and a new report reveals that the companies are planning to give some of their drivers cash bonuses which they will be able to put towards purchasing of IPO stock as these companies go public. This workaround enables Uber and Lyft as Securities and Exchange Commission rules prohibit them from directly granting stock to drivers, the rules indicate that private company stock shares can’t be given to contractors.
The SEC has asked for comments from companies on whether or not this rule should be changed but it’s unlikely that changes, if any, will be made in time before these companies go public. So when they give drivers cash bonuses with an option to put that towards shares, there’s nothing preventing the drivers from just keeping the money.
The companies are simply giving some of their drivers the chance to invest in them at IPO prices. The Wall Street Journal reports that Uber has earmarked hundreds of millions of dollars for this program which will give “a significant portion” of drivers straight cash bonuses or the ability to use the bonus to buy shares at IPO prices.
Lyft is believed to be offering $1,000 in cash to drivers who have completed 10,000 rides and $10,000 to those who have completed more than 20,000 rides. Neither company has officially confirmed their programs for this as yet.