Uber Plans Stock Market Debut While Drivers Strike

Rideshare drivers in major US cities were set to strike on Wednesday, casting a shadow over the keenly anticipated Wall Street debut of sector leader Uber.

Organizers in some cities were calling for a 24-hour stoppage while the New York Taxi Workers Alliance, which represents both app and traditional taxi drivers, called on drivers to shut down all apps between 7am (1900 HKT) and 9am.

The organizers called on drivers for Uber, Lyft, Via and other ride-hailing platforms to stop working as part of the protest.

It was unclear how many drivers would take part in the work stoppage amid strike calls in Los Angeles, Philadelphia, Boston and the US capital city Washington. A similar action was expected in London, according to US organizers.

The app drivers are seeking improved job security including an end to arbitrary "deactivations," and a better revenue split between the drivers and platforms.

In New York, the alliance was expecting most of its 10,000 app drivers to participate in the stoppage as well as some non-members.

"Wall Street investors are telling Uber and Lyft to cut down on driver income, stop incentives, and go faster to driverless cars," Bhairavi Desai, executive director of the New York association, said in a statement.

"Uber and Lyft wrote in their (regulatory) filings that they think they pay drivers too much already. With the IPO, Uber's corporate owners are set to make billions, all while drivers are left in poverty and go bankrupt."

Uber is set to launch its initial public offering (IPO) this week at an estimated valuation of some US$90 billion, including its options and restricted stock unit. The launch will be a major milestone for the company which has raised billions and disrupted the taxi industry in hundreds of cities around the world.

The move follows a troubled market debut for Uber's largest US rival Lyft, which has lost more than 15 percent of its value since its March IPO.

The strike highlights the dilemma for rideshare firms which have faced challenges from regulators and traditional taxi operators, for using a business model relying on independent contractors.

Daniel Ives, an analyst at Wedbush Securities, said Uber's rideshare "take rate" increased slightly to 21.7 percent in 2018 but that this will remain a hot point of contention for Uber.

"We do see added risk from Uber aiming to take greater share of the fare from drivers and expect that the more Uber pushes here, the more drivers will fight back and protest, increasing the likelihood of regulations (particularly at the state level in the US and in Europe) of minimum wage guarantees," Ives said in a research note.

Uber said in a statement: "Drivers are at the heart of our service -- we can't succeed without them -- and thousands of people come into work at Uber every day focused on how to make their experience better, on and off the road."

Lyft drivers' hourly earnings have increased over the past two years and surpassed US$10 billion, the company said in a statement.

"Over 75 percent drive less than 10 hours a week to supplement their existing jobs," Lyft said. "On average, Lyft drivers earn over US$20 per hour."

Both Lyft and Uber set aside some of their shares for drivers as part of their offerings. (AFP)