Should Uber/Lyft Offer Shares to Drivers Instead of Incentives?

— By Sergio Avedian —

In the driver-gig economy of 2025, the incentive structures used by major rideshare platforms such as Uber and Lyft are under renewed scrutiny. 

For years, many drivers have been motivated (or at least enticed) by “quests” (in Uber’s case) or “ride challenges” (in Lyft’s). Bonuses are contingent on completing a target number of rides in a given period. 

But with earnings pressures mounting, costs rising for drivers, and loyalty becoming harder to maintain, a provocative question arises: would it make more sense for these platforms to offer company shares (stock or equity) to drivers rather than continuing the current model of bonus challenges?

What the Current Incentive Model Looks Like

Both Uber and Lyft deploy quests or ride challenges, for example, “complete X rides between Tuesday and Thursday and get a $Y bonus.” These help platforms ramp up supply (drivers online) during certain hours, fill low-demand zones, or shift driver behaviour in real time. 

According to driver forum posts:

Many drivers feel the bonus model is opaque, inconsistent, and sometimes unfairly structured (e.g., high ride counts required, time pressures, low margin trips). The cost side for drivers is also rising: maintenance, fuel, depreciation, insurance, and many drivers report these eating into their net pay.

So the question is whether providing equity ownership interest in the company might foster a stronger, more aligned incentive for drivers, rather than just short-term bonuses. 

The Case For Offering Shares

1. Alignment of interests. If drivers held shares in Uber or Lyft, they would have a stake in the long-term success of the platform. This might encourage higher quality service, lower cancellation/decline rates, more loyalty, better performance, and less churn. The platform benefits from a more stable supply of motivated drivers; drivers benefit from share value growth.

2. Signal of value and respect. Offering shares can send a message: “You’re part of our ecosystem, not just a variable resource.” This could boost morale, retention, and the sense of collaboration.

3. Long-term value rather than one-off bonuses. Quests are ephemeral. Once the bonus is earned, it’s over. Shares remain (subject to vesting/terms) and could appreciate. Drivers who stay long-term may derive more benefit.

4. Differentiation in a competitive driver market. As driver supply becomes more elastic, platforms will need ways to stand out. Equity could be a differentiator, leveraging the narrative of being a “driver-owner” rather than purely a contractor chasing mini-bonuses.

The Case Against Offering Shares

1. Complexity and cost. Granting equity to hundreds of thousands of drivers is administratively complex and costly (legal, regulatory, tax implications, reporting, vesting schedules). The platforms might balk at that complexity.

2. Dilution and shareholder concerns. Issuing large amounts of equity to drivers could dilute existing shareholders, reduce EPS, or complicate governance. Investors may react poorly, but both Uber/Lyft offer millions of shares of RSUs to their current employees annually.

3. Drivers may value cash more than stock. Many drivers work because they need immediate income to cover expenses like fuel, maintenance, and insurance. A promise of future value via shares may be less compelling compared to immediate cash bonuses.

4. Equity value is uncertain. Stock prices fluctuate; if drivers see the share value decline, it may actually demotivate them rather than encourage them. Quests provide immediate, predictable incentives.

5. Contractor classification and regulatory issues. Drivers are classified as independent contractors (in most jurisdictions). Providing equity may blur lines between contractor and employee, raising regulatory risk.

A Hybrid or Phased Approach?

Given merits on both sides, a logical path might be a hybrid model: continue the bonus/quest system for short-term incentives, but layer in an equity-option program for drivers who meet certain long-term criteria (e.g., 2 years of driving, high ratings, or certain ride count thresholds). This could combine immediacy with long-term alignment.

For example, for every 1000 rides milestone, a driver receives a small unit of company equity (vested over time). Or drivers can opt in to hold part of their bonus in platform shares. This way, the platform doesn’t fully abandon the quest, surge, turbo system (which influences short-term behaviour), but also builds long-term loyalty and alignment.

Implications for Drivers and Platforms

For drivers, the adoption of a share-grant model signals a shift in mindset: from “drive lots this week for the bonus” to “build a career/ partnership with the platform.” This could be especially relevant as driver earnings have come under pressure. Studies show that driver take-home pay is squeezed, costs are rising, and rideshare driving is less lucrative than before.

For platforms, the move could help mitigate churn, reduce reliance on frequent large bonus pools (which cut into margins), and enhance brand image. It could also better position the company for a future where drivers, fleets, and autonomous vehicles coexist; having motivated drivers is a competitive advantage.

However, both sides must be clear about the terms: 

• How many shares

• How they vest 

• Tax implications for drivers (who may treat shares as income)

• Exit rights

• Transfer restrictions

• How the program interacts with the drivers’ contractor status

My Take

Should Uber and Lyft offer shares instead of quests or ride-challenges? 

The short answer: YES! 

But not as a full replacement, at least not yet. The platforms should explore adding equity-based incentives to their driver-reward structure, rather than completely eliminating existing bonus structures. 

Equity grants hold the promise of aligning long-term interests, elevating driver-platform partnerships, and offering drivers real ownership. But they shouldn’t discard the immediacy and simplicity of cash-based bonuses.

In an industry landscape where driver satisfaction and retention are increasingly critical, and where driving is becoming less lucrative, platforms that innovate on incentive design will have an edge. 

By offering shares, Uber and Lyft could differentiate themselves, build deeper loyalty, and offer drivers something more meaningful than “Complete 75 rides this week for $100.” For drivers committed to the long haul, owning a piece of the company you work for could be a game-changer.

Please send me your comments at [email protected]

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