Lyft IPO plans may pay big for some
The ride-hailing company Lyft filed paperwork Friday with the Securities and Exchange Commission, closing in on its highly anticipated initial public offering. And it had a little something for its drivers.
Lyft said it earned $2.2 billion in revenue last year, doubling what it made in 2017, according to the regulatory filing. But it said its losses also have grown, reporting a net loss of $911.3 million in 2018, compared with $688.3 million a year earlier. The company’s history of losing money was listed as a risk factor, along with intense competition, and it said there would be consequences if the work status of its nearly 2 million contract drivers is challenged by regulators or the courts.
As part of the IPO, Lyft is giving its drivers an opportunity to cash in. Those who have completed more than 10,000 rides are eligible for a cash bonus of $1,000, which can be used to purchase stock at the IPO price. Drivers with more rides will qualify for larger payouts, according to the filing.
The bonus program is notable because ordinary investors are typically excluded from purchasing a company’s stock at the IPO price before shares trade on the open market. So the plan elevates drivers above the general public. But it also highlights the ongoing tension between the ride-hailing companies and their millions of drivers. The people who shuttle customers around are not employees. And while the companies are valued in the tens of billions of dollars, they don’t grant contracted drivers the full benefits of employment.
Its chief rival, Uber, also is planning to offer a bonus and stock purchase plan to qualifying drivers with its IPO, which is expected later this year, according to the Wall Street Journal.
Lyft is among several highflying technology companies expected to go public this year.