Uber Investors Demand Clarity on Driver Payments
A group of investors in Uber Technologies is urging the company to provide more transparency on how it compensates its drivers. SOC Investment Group, an adviser to labor union pension funds, has proposed a resolution at Uber’s shareholder meeting next year that would require the company to regularly disclose a more detailed breakdown of driver compensation.
Unusual Opaqueness
According to SOC, Uber’s current practice of reporting “gross bookings” without separating out payments to drivers, restaurants, and insurance providers is “unusually opaque” and leaves investors in the dark. The company does not disclose how much commission it takes from driver earnings, nor does it provide information on how driver pay has changed over time.
Push for Transparency
SOC argues that clearer disclosure is essential for assessing Uber’s financial performance and its ability to make a profit. Richard Clayton, a research director for SOC, stated, “Their regular disclosures need to include all material information, not just once in a while.”
History of Shareholder Proposals
Uber has faced previous shareholder proposals related to driver treatment, including a request for a third-party audit on health and safety policies in May. However, investors rejected the proposal despite growing calls for better pay and protections for gig workers employed as independent contractors.
SEC Action Possible
Uber can attempt to keep SOC’s resolution from being put to a vote at its annual meeting by filing a “no-action” request with the US Securities and Exchange Commission. If this occurs, SOC would have the opportunity to present its arguments before the regulator decides.
Conclusion
The demand for transparency in driver payments is a significant concern for investors and raises questions about Uber’s business model. As the company continues to grow and face regulatory pressures, it is essential for Uber to provide a clear breakdown of how it compensates its drivers.
