Will Uber Employees Strike it Rich or Remain on the Sidelines?

With a $10 billion investment from Softbank finally underway and their collaboration with NASA on urban air mobility, Uber employees may very well be on the road to some serious wealth. If you think that aerial autos are still a figment of your imagination, NASA’s knowledge and technical leadership should help get Uber’s flying taxis in the air by 2020. And after months of negotiations, a consortium formed between Dragoneer Investment Group and Softbank Corp are buying billions of dollars worth of shares enabling early investors and Uber employees to finally be able to cash out on their stock options.

However, despite drivers being the heart and soul of ridesourcing, they will in no way benefit from this injection of funds, since drivers never receive any opportunities for stock options, and that goes even in countries such as the United Kingdom where they are considered employees. Still, this is a big deal representing a historical shift in the company’s culture and role in society. Experts agree that these changes could not only benefit those affiliated with Uber but even their home region of San Francisco, CA.

The managing director of San Francisco’s SharesPost Financial, Rohit Kulkarni, said that as of now, Uber employees are allowed to sell up to half of their stock holdings. This is until former CEO/current board member, Travis Kalanick, and early investor Benchmark come to terms with several conditions or presumably once Softbank’s investment is completed. Although some stakeholders are not restricted on the amount of shares they can sell, it may be in their best interest to wait until the company goes public in 2019.

Said Kulkarni:

 It creates a very positive near-term impact on the San Francisco economy.

The city’s chief economist, Ted Egan, said that this will have significant positive changes in the region’s economy. With San Francisco bringing in over $350 million of payroll taxes from 2016-2017’s  fiscal year and declining tax rates Egan feels, “This is a significant injection of cash into Uber as well as its employees. It will give more lift to the real estate market and spending.” All salaries and stock options for Uber employees will adhere to the SF’s payroll tax of 0.711%. However, their headquarters is located in the city’s ‘Twitter tax break zone’ where companies may be temporarily exempt from some payroll tax. In addition, employees who take advantage of their stock options are privy to the capital gains tax which is identical to the state’s income tax percentage.

Rick Turley, vice president and managing broker of a San Francisco realty firm, is also optimistic about the proposed Softbank deal. Turley hopes it will bring equilibrium to the city’s supply and demand of housing. He mentioned to the San Francisco Chronicle that, “Inventory remains at historic lows. If there were news of a big pool of potential buyers becoming available overnight, I would think some sellers who’ve been waiting on the sidelines would come to market to take advantage of it.”

However, critics remain skeptical about the uncertainty surrounding the deal. Founder of the National Center for Employee Ownership in Oakland, Corey Rosen said, “The state’s budget is significantly dependent on people making money selling shares. When you have a stock market boom, the treasury is pretty flush. When it busts and there aren’t capital gains taxes, that’s caused some problems.”

So although Uber employees and early investors have the option of selling their stocks, the frequency of those being sold will dictate the success of this deal. If all goes according to plan, those affiliated with the company along with the immediate region they serve will greatly benefit.

Do you think this deal will suffice or will it fall through as quickly as it came? Let us know what you think about Uber’s state and future ambitions!

Remember to subscribe to our newsletter!

Follow The Scope Weekly on Twitter and Facebook and Instagram!

If you would like to become a contributor to The Scope Weekly, read our submission guidelines, and apply. For product reviews, click here.

We welcome your ideas and recommendations.

Tags from the story
, ,
More from SW Newsmagazine
Minorities and Women Moving Away from Tech Jobs – and Why It’s Bad for Business
Unfairness-based turnover in the tech industry is a $16 billion-a-year concern. A...
Read More
One reply on “Will Uber Employees Strike it Rich or Remain on the Sidelines?”