Cory Savary didn’t expect to get rich driving for Juno. But he did reckon the ride-hailing startup that promised him part-ownership in the company as a motorist would stay true-life to its word.
“I belief even if I wasn’t going to be a millionaire, I could at least get a couple hundred dollars for the blood, sweat, and tears and risking my reputation for these companies, ” mentioned Savary, who started driving full-time for ride-hailing apps in 2015 and signed up for Juno last summer.
Juno sold to Gett this week for $200 million, combining the two companies into an interesting third player in the U.S. ride-hailing market. It was the type of deal that was supposed to intend a payday for Juno’s equity-holding drivers.
Instead, Savary was offered $100.
“This is penny stock I could induce more picking up pennies in Manhattan, ” he said.
Attracting drivers is crucial to the success of ride-hailing companies. When Juno launched in New York City about a year ago, its “socially responsible” mission and driver friendly policies helped it convince people like Savary to add it to their rotation alongside Uber, Lyft, Via, and Gett.
A big part of that was the offer of equity in the company. Motorists would own “restricted stock units” in Juno who are able to translate into cash if Juno ever went public or got sold. The shares were awarded based on how much a motorist drove for Juno as long as they hit 120 hours a month on the platform.
Now, those drivers are getting their payouts, and they’re not happy.
Drivers who had thousands of shares based on their work for Juno, like Savary, were offered payouts generally around $100, according to the emails they received from Juno.
Based on the email below, drivers received less than $0.03 per curtailed inventory unit.
Exactly how drivers’ inventory in Juno would work was always a little fuzzy. Juno couldn’t give out stock to its drivers forever, since a company only has so much equity available, and taxation law made awarding these shares tricky. Juno told drivers in its email announcing its acquisition by Gett that before the merger the company was already reevaluating its equity awards after hearing from the Securities and Exchange Commission.
The SEC had asked Juno to change how it was implementing the program going forward, specifically registering it or use an exemption from enrollment in a different style. Given these discussions with the SEC, Juno was considering, among other things, whether the RSUs previously granted were void under the terms of the RSU program.
Either way, they’re void now. Gett, an Israeli corporation with a small existence in New York, won’t continue Juno’s stock program. Instead, the ride-hailing corporation will offer cash incentives that similarly depend on how much a motorist uses the Juno app( which will remain separate from Gett for now ). But that cash incentive program doesn’t come with the bigger-picture strategy of treating drivers like partners and part-owners in the ride-hailing endeavor.
“It’s really sad what happened. Most drivers are very frustrated and saddened by it, ” mentioned Steven Savander, a part-time ride-hailing motorist who talks to other drivers through the Independent Driver Guild.
“Giving up all those shares for a couple hundred bucks is a slap in the face.”
Drivers weren’t expecting to make it big through their inventory in Juno, but many thought the shares would be worth more than $100, specially considering Juno’s sale for $200 million.
To get their stock payouts, drivers must waive all claims to any other compensation through Juno’s RSU program. Some drivers don’t wishes to do that and are trying to figure out what kind of legal recourse they have instead.
“I hope to sue, ” Savander, who was granted $107 for his 6,035 shares in Juno, mentioned. “Giving up all those shares for a couple hundred bucks is a slap in the face.”
Juno didn’t respond to request for commentary or answer questions about the calculation it used to translate inventory into cash payouts. And the end of the only ride-hailing option that seems to make a meaningful great efforts to prioritize drivers begs the issues to: Is it was feasible for a ride-hailing corporation to compete with Uber while treating drivers well?
“It sends mixed signals. The reality that Juno was able to come in and become the de-facto No. 3 competitor after Uber and Lyft in the most difficult transportation market in the world with a driver-focused angle shows that, on a local level, “its easier to” than people might think to compete with Uber and Lyft, ” mentioned Harry Campbell, who runs the blog The Rideshare Guy and transmits with ride-hailing drivers across the country. “At the same hour, Juno went into talks with Gett and realized the operational side was insanely challenging. That’s actually the most difficult opportunity on the consumer side of Uber there’s not a whole lot that can be improved, but on the drivers’ side there are a lot of problems and a lot of opportunities.”
Along with awarding inventory, Juno took a lower cut of the fares drivers earned than its ride-hailing competitors and distributed smartphones for drivers to use to run the app. Those smartphones, though, served as advertising for Juno while drivers might have been ferrying Uber passengers around New York.
“They built the company on drivers’ reputations and word of mouth, ” Savary mentioned. “And then they sold it and mentioned screw you, we’ll give you $100 so shut up and take this. It’s really unfair.”