Uber, Lyft to Offer IPO Stock to Some Drivers
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What quick money and market headlines lead this Money Briefing?
With your money briefing, I'm J.R. Whelan at The Wall Street Journal in New York. How'd you like to be a driver for Uber or Lyft? And how'd you like it if the companies tacked on an opportunity to get in on the IPO? We've got the details coming up. First, these money and market stories you should know. The IRS says the average tax refund so far this tax filing season was $3,143 through February 22nd. That's a 1.3% increase in the same period last year. Before now, average tax refunds had been running behind last year's pace. So far, about 81% of tax returns that have been processed are yielding refunds, and that's about the same as last year. In a statement issued after the data released, the Treasury Department said that refunds rose 19% from the previous week, when the average refund totaled $2,640.
And that's likely because the week's batch includes more payments of refundable tax credits and net benefits for lower-income families than who receive the Earned Income Tax Credit and Child Tax Credit. Those taxpayers tend to file early in the tax season so they can get the refunds for major expenses or debt repayments. The IRS is now prohibited from releasing those refunds until February 15th. And the U.S. homeownership rate climbed in the fourth quarter to the highest level in nearly five years. And that shows the momentum is shifting back to owning instead of renting. The Census Bureau says the share of American households that own their homes rose to 64.8 percent in the fourth quarter of last year.
That's up from 64.2 percent a year earlier, the last time the homeownership rate was that high.
How much are average tax refunds this filing season and why did they rise?
was in 2014. A shift in the U.S. toward rentals at the expense of homeownership had been going on for years after the housing bust, both for lifestyle and affordability reasons. Now there's growing evidence that trend may be reversing. The U.S. added about 1.7 million owner households in 2018, but lost 167,000 renter households.
Two of the most hotly anticipated IPOs are getting closer and closer to reality. But it won't be just the fat cats on Wall Street getting in on the action. Wall Street Journal reporter Maureen Farrell is here with some details. So, Maureen, this involves the ride-sharing companies Uber and Lyft. They're giving their drivers a chance to get in on the IPO ground floor.
They've both decided to find some way to either give their drivers cash or give them cash to buy stock. So this will give them a piece of the IPO, essentially, many of them.
Is this unusual to allow employees to do this?
What's going to be the most unusual is the scale. When you think about it, there are millions of drivers and it's not going to be all of them. It's going to be a tiered system with only the most tenured drivers essentially getting it. We've seen this on a smaller scale in some IPOs. There'll be a friends and family program. There's a situation in Etsy, the online craft company, where their vendors, their store owners were able to buy shares of the IPO. So they had something like this on a smaller scale. There will be friends and family plans. But this is going to be massive. And what I've heard from some people is that as the gig economy, as we see more of these companies, and obviously very few will be of the size of Lyft and Uber, but this might, should it work, might be a model going forward for something like an Airbnb and hosts or other companies.
Yeah.
So what's also unique here is there's more than goodwill going on here with the companies and the drivers because of how competitive it is to bring on drivers to Uber and Lyft and to hold on to them. It seems like this is a way to keep the drivers from jumping from company to company and rewarding the longevity.
Exactly. I mean, a lot of drivers work for both Uber and Lyft. So the way that Lyft, at the very least, seems to be constructing its program, and we know a lot more details about Lyft so far, is that you have to have 10,000 rides. That's a lot. That takes years to build up. So if you say maybe some drivers have done 10,000 rides between Uber and Lyft.
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