Rideshare giants prepare for spring IPO’s amid widespread controversy and driver dissatisfaction
by Mike Beggs
It seems like high times for ridesharing giants Uber and Lyft as they race toward IPO’s, projected to be valued at $120 billion, and $20 to $25 billion, respectively.
Both companies filed confidentially for IPO’s, in December.
And on March 18, Lyft launched the road show for its’ initial public offering, putting 30 million shares up for sale at a price of $62 to $68 per share – raising about $2 billion for the San Francisco-based firm.
For the first time, Lyft released financial details – reporting $2.2 billion in revenues in 2018, (more than double those of 2017), but accompanied by a weighty $911 million in losses. Its’ share of the U.S. ridesharing market climbed to 39 percent in December of 2018 (up from 22 percent in December of 2016).
Rett Wallace, a researcher who tracks IPO’s, told the New York Post that Lyft’s taking the lead in the IPO race means, “Investors who own Lyft will have to make room for Uber, versus the other way around.”
Most recently valued at $76 billion, Uber was planning its’ initial public offering for April. According to Reuters, the company reported a mind-blowing total bookings of $50 billion for its’ ridesharing and food delivery divisions in 2018, but lost a vast $1 billion-plus in the fight for market share (continuing to heavily subsidize rides in competitive markets).
While dominant the world over, for the past several years Uber has been putting out fires seemingly from every side – from the shameful practices of its founder Travis Kalanick, to the thousands of sexual assaults committed by its’ drivers, to paying out $148 million over last year’s massive data breach, to controversy (and further settlements) over its’ driver background checks and alleged discriminatory hiring practices, to a recent $20-million settlement in a class action suit filed by disgruntled drivers in California’s Northern District Court.
And on March 25, thousands of Uber and Lyft drivers in Los Angeles staged a strike to protest Uber’s implementing a 25 percent pay cut. According to Vox, hundreds of drivers protested outside Uber’s office in suburban LA, and the striking drivers called on Uber customers to use public transit instead of apps.
While their TV ads promise good money in part-time hours, around the world there have been consistent complaints from Uber and Lyft drivers about low wages, long hours, and the lack of data provided them by the companies.
In LA, drivers say the pay cut means they will now earn 60 cents per mile, instead of 80 cents per mile.
“Help us to end this neo-indentured servitude”, one of the strike organizers, driver Sinakhone Keodara tweeted.
But the LA drivers are not only calling on Uber to reverse the pay cut, they’re seeking a raise – to a $28 per hour minimum rate.
As independent contractors, Uber and Lyft drivers don’t receive benefits, overtime, or the minimum wage.
And while they don’t have the right to unionize under U.S. federal law, drivers have been busy organizing to get their voices heard. The non-profit Ride Share Drivers United has grown from 300, to 23,000 members around the world, Vox reports.
An organizer for the group, Drivers United, Uber driver Nicola Moore told Gizmodo, Uber and Lyft have been in “a mad rush to the bottom” in terms of paying their drivers, and, “I’m not going to take it anymore.”
“Tech companies are cutting our wages in order to win millions for investors, on the threshold of their IPO’s,” she tweeted.