Upcoming Uber IPO Surrounded by Concerns of Price Hikes, Pay Cuts

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May 1, 2019

By Amanda Weston

While Uber prepares for its much-anticipated initial public offering, some of the people at the center of its business aren't thrilled about the debut: the drivers.

Uber's IPO reportedly became oversubscribed just two days into its roadshow. But in the meantime, some drivers are planning protests.

One tweet called for drivers to "disrupt the IPO and force Uber to treat drivers with respect."

Harry Campbell, owner and founder of The Rideshare Guy blog and podcast, told Cheddar the protests stemmed from a recent pay cut in Los Angeles, in which he says Uber dropped the per mile rate it pays drivers by 25 percent.

"We've seen rate cuts over the years, but I think this one, especially at a time where Uber is IPO-ing and potentially going to be making billions of dollars, it just doesn't seem like the right time to be cutting drivers' pay," Campbell said.

"I mean, not that there's ever a good time, and so I think that kind of contrast really motivated a lot of drivers to get out there. And the first strike that they held in L.A. had a few hundred drivers, a really good turnout. And I think this one has now expanded to eight cities, so I do think that this is something that Uber needs to think about and take into consideration in the future."

Campbell said the Lyft and Uber IPOs actually started on a positive note for some drivers, namely with a bonus they could turn into an IPO investment. But the benefits coming to employees and shareholders would be a significant difference.

He added price hikes and pay cuts could be in the company's future.

"I don't think they need to do anything drastic, but I do think over time rides may get more expensive," Campbell said.

"You know, those offers that you're used to seeing from Lyft or Uber, 'get 10 percent off your next five, your next 10 rides,' those may start to disappear, unfortunately. I think it's still going to be an affordable service for a lot of people. But I do think that the cost of rides potentially could go up in the future for sure."