There is always something new going on in payments — such that it is easy to lose track. But every once in a while a week tosses up a few things that are genuinely surprising.
For example …
Pre-IPO Bonus For Uber Drivers
That many people will see their bank accounts increased when Uber’s IPO goes into the history books later this year is more or less a foregone conclusion. Barring some sort of apocalyptic event, most sources are so sure it is coming that the web has been aglow with a thousand think pieces about how the coming Uber IPO and all the money it will carry in its wake is likely to remake San Francisco.
Somewhat less expected were reports this week that Uber drivers will apparently be a part of the IPO cash-in — though at far below the seven-figure (and up) level forecast for the executive team.
According to SEC filings out this week, Uber is gearing up to award bonuses to its drivers for its IPO — in amounts up to $40,000 each. According to the filing, those bonuses will total up to about $300 million paid out to 1.1 million drivers worldwide. Uber said in the filing it was paying a one-time cash driver-appreciation reward to “acknowledge drivers who have participated in our success.”
Bonuses will be awarded to drivers in proportion to how many trips they’ve done for the company. If the driver has mades 2,500 trips, he or she gets $100. That increases to $500 for 5,000 trips, $1,000 for 10,000 trips, $20,000 for 20,000 trips and $30,000 for 30,000. The maximum payout is $40,000 for 40,000 trips.
The drivers had to have to completed a minimum of 2,500 trips as of April 7 to be eligible for the bonus. The driver also has to be in good standing.
Uber also said in the filing that it set aside 5.4 million shares of its IPO for the drivers. They can purchase them through a direct share program the ride-hailing company offers. The drivers who are eligible for the driver-appreciation award can take part in the IPO later this week.
The move comes shortly before Uber’s IPO — and the large-scale driver protests scheduled for later this week (May 8) in New York, San Francisco, Chicago and Washington D.C. to protest what they view as unfair employment conditions.
Uber currently expects to price its IPO on May 9 and begin trading on the New York Stock Exchange the following day.
Facebook $1 Billion Crypto Plan
Facebook is apparently getting serious about cryptocurrency — with reports out this week that the social media giant is meeting with financial firms in preparation to build its own cryptocurrency-based payments system.
Code-named Project Libra, the plan would create an in-house digital coin for Facebook users to send to each other and to merchants for eCommerce purposes. Reports last month indicated Facebook is looking for as much as $1 billion in investments for the initiative.
Some big names have at least expressed some early interest in the project in some capacity, according to WSJ reports — with Visa, Mastercard and First Data all named. Facebook is also talking to eCommerce companies and apps about accepting the crypto coin, as well as gaining additional smaller financial investments from them.
The crypto-backed payment system would allow users to leverage their Facebook credentials for checkout. There is also the possibility that Facebook will reward users with coin fractions for watching ads, interacting with content or shopping on the platform.
For merchants, Facebook is reportedly offering lower fees than the typical card-processing costs that merchants pay on transactions. It is also working on a system where users could click ads to buy a product and pay with Facebook tokens, and then the retailer would be able to recycle those tokens to pay for more ads.
Marriott Takes On Airbnb Directly
Marriott International is jumping into the world of home sharing in a bid to take on Airbnb and the host of like firms that have taken up residence in the travel lodging market over the last decade. According to unnamed sources cited in Wall Street Journal reports last week, Marriott is looking to build a rival home-sharing platform that would allow guests of home shares to earn and redeem loyalty points.
Ryan Meliker, who has served as a lodging analyst and hotel investor, told the outlet, “It’s clear that the home sharing phenomenon is here to stay, and hotel companies want to make sure they get their piece of this pie.”
Marriott is not the only big name player in traditional hospitality taking a swing and the sharing economy — Hyatt Hotels Corp. and Hilton Worldwide Holdings Inc. are also said to be looking into the home rentals business.
And, interestingly, those moves come as the home sharing big names like Airbnb are attempting to get into the more traditional hotelier business. News surfaced that Airbnb had acquired HotelTonight, a platform that helps consumers locate discounted hotel rooms. The move was said to be a step toward expanding Airbnb’s business and bringing in a broader base of customers, such as those who enjoy exploring but don’t want to stay in a person’s home.
Airbnb Chief Executive Officer Brian Chesky said, per reports at the time, that buying the hotel site was “a big part of building an end-to-end travel platform.”
What did we learn this week?
Variety is the spice of life — be it in the form of cash bonuses, plans to build new rails on new technology or a new sharing economy platform.
Until next week …
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