Recruiting drivers is one of the toughest and most expensive challenges for a rideshare company, but keeping them is even harder. Juno, a New York City-based rideshare company has what may be a unique way to attract and hang on to drivers — give them stock in the company, according to Venture Beat.
At first blush, handing out shares to employees is a time-proven strategy for tech companies, especially startups. The hope for a fat initial public offering (IPO) with a huge potential payout lets employees have a stake in the game. They may trade off security, higher wages, or other perks to assume some risk with the potential of greater financial reward when the company goes public. Stock compensation made millionaires of early Microsoft and Amazon employees, so why not rideshare drivers?
It would be easy to argue that no rideshare companies have gone public and none so far have made a profit. Benefitting from Juno’s stock plan for drivers could take a while. On the Juno website driver invitation page, the company invites potential drivers to come for coffee and hear the Juno story. Three listed points are 10-percent commission, 24-hour support, and “true partners.”
Juno explains true partners as, “50 percent of our founding shares are reserved for our drivers.” And at the bottom of the page, in slightly dimmer type, “Over a period of ten years, we intend to distribute to drivers a number of RSUs that would give drivers the same ownership interest as our founders upon an IPO or sale assuming all such RSUs vest.” An RSU is a restricted stock unit, which means its value is assigned when vested to a person. Restricted stocks are treated as taxable income and some shares will be held back to pay income taxes.
So that is likely more than you care to know about the specifics of Juno’s stock perk for drivers. Regardless of the eventuality of a payout, however, the plan gives people a sense of ownership, which is an intangible that may make a difference for some Juno drivers.
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