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BREAKING NEWS

'Burn baby burn': Some drivers happy to see Uber and Lyft shares fall after IPOs

Image: Uber driver strike
Protesters hold a rally and stop traffic on Market Street outside of Uber headquarters, on May 8, 2019, in San Francisco. -
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Eric Risberg AP
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Some drivers who accuse Lyft and Uber of mistreatment and low pay are finding a small measure of satisfaction at the market's tepid reaction to investing in the newly public companies.

But they're also well aware that pressure to turn profitable could mean even tougher days ahead for drivers as the companies look to cut costs.

In interviews and on internet message boards, the drivers expressed schadenfreudein the losses experienced so far by executives, big investors and other company insiders who may have purchased shares before a recent dip reflected doubts about the long-term viability of Uber and Lyft.

"Burn baby burn!!!!" one user of Reddit wrote in a group dedicated to Uber drivers, after the company's stock price dropped following its initial public offering last Friday. "As a driver who has been screwed over for years I will say I'd love to see them go bankrupt!"

Other drivers said they took no joy in how the shares initially fell, but hoped the result would be better treatment of them.

Shares in Lyft and Uber are trading below what they initially sold for in their public debuts this year, though they both recovered somewhat from their lows this week during a broad market rally.

On Thursday Lyft traded at around $56 a share, well below its IPO price of $72 a share, while Uber traded around $43 a share, below its IPO price of $45 a share.

The simmering tensions between management and drivers — who went out on strike for a few hours in cities across the country last week — is a long-term challenge for both groups, because the companies can't survive without a readily available pool of drivers, and drivers increasingly have other options in a tightening labor market.

The ups and downs of the stock price are another battlefront, along with last week's strike and the long-running debate over whether drivers are company employees or contractors.

"Some people are kind of happy to see Uber go down into the dumps," said Kaylania Chapman, 40, who drives for Uber's food delivery service UberEats in Orlando, Florida, and runs a YouTube channel about to the gig economy.

Chapman said she's not one of those people gladdened by Uber's troubles, but knows drivers who are, driven in part by the behavior of Uber's ex-CEO Travis Kalanick and the way both companies have squeezed payments to drivers in an effort to stem losses.

"When a CEO of a company is not being responsible and is not taking care of the workers, this is one of the consequences of Uber's actions," she said of the stock drop. "The CEOs are making all this money, and we're making nothing."

Uber and Lyft did not immediately respond to requests for comment.

Because there's no water cooler for the companies' drivers to gather around, they often trade frustrations, tips and other thoughts on internet message boards and groups such as Reddit and Facebook. Another Reddit user, who described himself as a former Lyft driver but declined to give his name, citing restrictions from a current employer, said it would be just deserts "if the investors get wiped out" because they mistreated drivers.

"The subreddit is a very good sort of mirror on how I think a lot of drivers feel about Uber as a company," said William Golden, 53, who drives in New Jersey. Of the investors, he said: "Now they can take their money and run."

On UberPeople.net, another message board, that company's post-IPO stock swoon was among the most popular topics this week, as commenters compared Uber to failed energy company Enron and speculated what would happen once employees' "lockup period" ends, in which they are restricted from selling stock, and even more people try to sell shares.

Some people have already gotten wealthy, or wealthier, from the IPOs even though the share prices have fallen, because such public offerings are designed in part to allow early investors to cash out.

Others, such as newer investors or executives and employees who are restricted from selling their shares, are still waiting for their pay days.

Among the biggest shareholders at the time of the IPOs were Silicon Valley venture capital firms, sovereign wealth funds and company founders — but not drivers, a job that suffers from high turnover in part because of the low pay.

"I think a lot of drivers are seeing the investors and execs become obscenely rich and the drivers get left behind," said Jos Cashon, a member of Rideshare Drivers United, an association of Uber and Lyft drivers.

Cashon said she was hopeful that over time the corporate struggles of Uber and Lyft would highlight an unsustainable situation.

"Taking a more long-term view, I think it's a good thing that these companies aren't performing well, because their ultimate goal is to kill jobs," said Cashon, 28, of Los Angeles. "And if the stock market rejects that, it's a good thing for the future of labor."