Uber readies its IPO amid conflict over driver pay
The rideshare company has to deal with driver dissatisfaction over pay before launching its IPO.
Uber is reportedly preparing to launch its initial public offering(IPO) in May and expects to make billions of dollars. However, many Uber drivers contend that they aren’t getting their fair share of wages from the rideshare company.
Why are some Uber drivers unhappy with their pay?
Some Uber drivers maintain that they are underpaid because of a rule change in driver pay in some cities, like Los Angeles. The pay change will cut drivers’ per-mile pay by 25%. Several drivers recently went on strike in March to protest that decision in March and accuse Uber and Lyft Inc of not paying workers enough for the long hours they log while driving customers.
Uber driver, Mostafa Maklad, wrote an op-ed that details why he feels drivers should have a bigger share of rideshare companies’ potential profits.
‘Drivers are workers and we deserve a fair share of the millions that we make for Uber and Lyft each year. We are all driving to survive, but we work for a company that makes us fend for ourselves when times are tough,’ wrote Maklad.
‘Uber and Lyft can choose to change; a living wage, healthcare, paid time off and worker protections aren't too much to ask from a company potentially worth $120 billion,’ continued Maklad.
Uber responds to drivers’ complaints
Uber denies that it is not diminishing drivers’ pay with the rate change. The company maintains that drivers are now paid based on distance and time.
‘The time based increase is balanced by lowered rates for distance, so your overall payouts should remain the same. In particular, we expect that you’ll be able to earn more on shorter trips or when you’re stuck in traffic,’ said Uber in a note to drivers.
Uber noted that it also has an Uber Pro driver rewards program for some US workers. Through that system, drivers can save 25% on car repair and receive cash back on purchases at gas stations on an Uber debit card.The rideshare company is also slated to offer long-term drivers stock options or cash bonuses as well.
When Uber debuts its IPO later this year, the corporation has to deal with a lot of questions from investors-and its drivers.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
