Uber stock sinks and drivers protest as lockup period ends

The ride-hailing company "has spent a decade creating algorithms to squeeze every red cent out of drivers," one protester says.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
3 min read

Uber drivers and their advocates protest in San Francisco on Wednesday.

Dara Kerr/CNET

Wednesday marked the first day Uber investors and employees could cash out their shares and turn their stock into real money. While many early investors said they'd hold onto their shares, others flooded the market causing Uber's stock to hit record lows.

By the end of the day, the company's shares were trading at $26.96 -- roughly 40% lower than its initial public offering of $45.

Likely adding to Uber's woes on Wednesday were coordinated driver protests throughout California. The drivers' goal was to draw attention to how the end of Uber's lockup period will likely add to the disparity of wealth between themselves and the company's investors and employees.

"Uber has spent a decade creating algorithms to squeeze every red cent out of drivers," Erica Mighetto, a Sacramento-based Uber driver, said at a protest held at one of Google's San Francisco offices. Google Ventures, the company's venture capital branch, owned more than $5 billion in Uber shares as of May. "There is no reason why Google Ventures makes millions of dollars when drivers, like myself, become homeless."

Once considered a too-big-to-fail Silicon Valley success story, Uber has experienced a pummeling as a public company. Since its debut on Wall Street in May, its share price has slumped, three board members stepped down and it saw an exodus of executives. Uber also laid off about 5% of its staff in three rounds of cuts. Optimism in the company appears to be running low.

As the lockup period ended on Wednesday, the company saw its share price bottom out at an all-time low of $25.58. According to Bloomberg, Uber was one of the most actively traded US stocks for the day. At one point, a block of 7.75 million shares were sold and later Goldman Sachs sold another block of 2 million shares. Uber had roughly 1.7 billion shares when it went public, according to filings with the US Securities and Exchange Commission.

Uber didn't respond to request for comment.

Along with taking hits on Wall Street, Uber is waging a battle in its home state of California. After Gov. Gavin Newsom signed legislation in September that could require Uber and Lyft to reclassify their drivers as employees instead of independent contractors, Uber vowed to fight the law. Along with Lyft and other on-demand companies, Uber put $30 million behind an initiative to take the issue to voters next November. Many drivers say this move was a slap in the face as they struggle to earn a living wage.

Drivers and their advocates targeted three locations to protest on Wednesday. Along with the Google office, they picketed in front of the homes of Uber co-founder Garrett Camp in Beverley Hills and venture capitalist Bill Gurley in Atherton, California. Camp's investment in Uber was reportedly worth $3.2 billion when the company went public and Gurley's was valued at around $600 million.

At the San Francisco protest, about 50 people showed up carrying signs that read "Deactivate Uber Billionaires" and "Drivers make pennies, investors make millions." Speakers -- including drivers, labor organizers and politicians -- took to the microphone to talk about low earnings and lack of worker protections.

"We stand in solidarity with drivers and workers," said San Francisco Supervisor Gordon Mar. "When we stand together, when we fight together, we will win."

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