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Uber hoped to celebrate a big payday. Instead, a sinking stock and more protests

Suhauna Hussain and Johana Bhuiyan, Los Angeles Times on

Published in News & Features

But two trends in the tech world have dampened the excitement.

First, there's a chance that some employees have already partially cashed out. There's now a thriving secondary market for stock options, especially at big companies like Uber, which allow employees to sell shares while a company is still private.

But the industry trend toward delaying IPOs by raising larger and larger rounds of private capital has had a more significant effect. Employees take payment in stock based on the hope that a company's stock will go up once it's in the public market. But an analysis by EquityZen, one of the companies that run a marketplace for trading employee stock in start-ups, showed that the price of Uber stock had remained essentially flat from 2016 through the IPO, even as the company hoovered up larger and larger piles of investment.

In fact, Uber's stock price today is more than 10% lower than in December 2014, according to the report, meaning that even five-year employees of the company may not wind up taking home as much as they anticipated.

It's just another blow for a company taking hits from all sides.

Along with pressure from investors, Uber's entire business model in its home state of California is in question after Gov. Gavin Newsom signed sweeping new employment rules into law in September.

 

California businesses will face more limits on their use of independent contractors, upon which Uber's business is built. The San Francisco company classifies its thousands of drivers as contractors rather than employees, which saves it money and helped enable its rapid expansion.

Under the law, drivers could qualify as employees and thus be granted perks such as health insurance, workers compensation and minimum wage requirements. Uber and other gig-economy companies have pledged $90 million to fight the law with a ballot initiative, saying its workers prefer the flexibility of nontraditional employment.

Workplace issues were top of mind for the 30-some drivers who marched down a tree-lined cul-de-sac Wednesday in Atherton, an affluent Bay Area suburb popular among tech types. Their target was the home of Benchmark Capital partner and former Uber board member Bill Gurley.

Holding signs that read, "Investors live in mansions, drivers live in cars," they rallied under the watch of Atherton police, who arrived with multiple cars including a K-9 unit.

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