Lyft Inc.’s plans for an initial public offering include a perk for the ride-hailing platform’s top drivers: an option to buy stock in one of the hottest IPOs of the year. Many drivers, though, won’t quite make the cut.
According to the company’s filing on Friday with the Securities and Exchange Commission, drivers who have completed at least 10,000 rides will get a $1,000 bonus, with the option to use the money to buy Lyft shares at its IPO price.
The company will award drivers with at least 20,000 rides $10,000 and the same option. The ability to invest in a company before it becomes publicly traded is a chance most ordinary investors don’t get, and is considered valuable since the share price of a company can jump in early trading.
One New York City ride-share driver, Mead Almontaser, began working with Lyft about two years ago and estimates he’s given about 3,700 rides. The former convenience store owner has since taken up driving full-time, typically working seven days a week for both Lyft and Uber Technologies Inc. While Almontaser’s ride tally with Lyft falls far short of the number he’d need to win the bonus, it didn’t stop him from contemplating the possibilities.
“I would go with the stock,” he said. “The cash will always go, but with an investment you have a chance to make more money.”
Lyft had 30.7 million riders and 1.9 million drivers in 2018, according to the filing. Its larger rival Uber is likely offer to drivers a similar program when it goes public, issuing awards based on length of service and number of trips or deliveries completed, according to reporting by the Wall Street Journal.
Both programs are designed to reward the companies’ most loyal drivers, who were often the ones most responsible for helping fuel the startups’ respective successes. For people who earn their living driving for ride-hailing platforms, though, loyalty isn’t always easy.
Many drivers split their time between two or more ride-sharing services, which could make it more challenging to meet thresholds for extra cash and stock. Tashi Tsering, who used to sit behind the wheel of a yellow cab before switching to Uber, has racked up close to 9,800 rides on the platform over the past four years.
Meanwhile, he has logged about 1,600 rides through Lyft since joining two years ago. “Sometimes I like Lyft, sometimes Uber,” Tsering said. Like many drivers, he keeps both apps open when searching for rides, trying to find steady work.
Tsering was familiar with both anticipated IPOs, but was not aware of the potential opportunity to invest if he met certain requirements. He said he would want to spend any bonus on stock if able. But expenses are also an issue — ride-share drivers typically pay for their own fuel and their own cars — and Tsering said that he would have to consider his income and costs before making a decision.
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