Uber asks the SEC to let it give company stock to drivers
If Uber drivers were employees, this would be a non-issue
Why it matters: Uber and other gig economy specialists have indeed
changed how millions of people work. The fact that workers are
independent contractors and not actual employees, however, has long been
scrutinized and criticized. Should legal changes be made to accommodate
and compensate these new forms of work?
Uber is petitioning the Securities and Exchange Commission to reconsider
its stance on compensatory securities offerings to reflect the
“changing nature of work by individuals in the entrepreneurial economy.”
In other words, Uber wants to be able to compensate its drivers using company stock.
For a business with traditional employees, compensation through stock
offerings wouldn’t be a problem. But in the case of Uber and others that
participate in the gig economy, the fact that workers aren’t
technically employees of the company but rather, independent
contractors, complicates matters.
In Uber’s letter, obtained and shared by Axios, the company argues that
providing equity to partners would allow them to share in the growth of
the company and could lead to enhanced earning and saving opportunities.
How people work is changing, Uber notes, and they’d like the commission
to modify its rules to reflect these alternative work arrangements.
This isn’t the first time Uber has discussed the matter with the SEC nor
is it the first company to do so. Airbnb last month also sent a letter
asking the SEC to revise Rule 701 of the Securities Act to allow it to
issue stock to its “most loyal hosts.”
Even if successful, additional changes would be needed as it relates to tax law.
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