Juno's first birthday cake.
Juno
When ride-hail startup Juno came out of stealth in February of this year it did so with an unusual premise: an offer of equity to anyone who signed up to drive for the company. Now, 5 months later, it is preparing to deliver on that pledge. Next week Juno will begin issuing promises of equity to drivers, the company confirmed to BuzzFeed News.
For Juno, which claims to have registered 11,000 drivers so far, the equity offering to drivers is a grand gesture with which to position itself as a fairer, more ethical alternative to Uber and Lyft; a company which intends to do right by the drivers on which it will build its business.
“Every time somebody goes into an Uber, they’re compromising their values,” Juno co-founder Talmon Marco told BuzzFeed. “ I want them to think of Juno as a company that’s a blend of great service but at the same time, socially responsible.”
In addition to pledging to allocate 1 billion shares to drivers, Juno takes a 10% cut of their fares – less than half the 25% claimed by Uber and Lyft. It also says it will offer drivers the option of being independent contractors or employees if they are willing to work exclusively for Juno, something Uber and Lyft — which have both been sued over worker classification issues in the U.S. — have so far refused to do.
Juno says it will issue 25 million “restricted stock units” or RSUs to drivers each quarter, beginning with the quarter that ended on June 30. Each RSU is bound by vesting and liquidity restrictions that dictate when and under what terms it can be sold. Juno plans to give eligible drivers shares based on the fares they've completed, minus tolls. Then the company will determine a subset of top drivers, who will receive bonus RSUs, to prorate the 25 million shares. The company declined to provide BuzzFeed News the agreement it will send drivers for its RSU grants.
For drivers to be eligible for Juno's stock plan, they must log a minimum of 120 hours on the app monthly. And they must remain active on the app for “24 out of 30 months” for the RSUs they're granted to vest. Juno’s founders hold 1 billion shares; The company says that within 10 years drivers should hold an equivalent number.
"It’s a nice offer. But I don’t think anyone’s going to retire off of it."
For the shares to actually be worth anything to drivers, Juno will have to eventually go public or sell itself. “The plan is definitely to take the company public when it makes sense so our drivers can actually get something out of these [shares],” Marco said.
While intrigued by the promise of Juno equity, some early drivers who've signed up for the service are dubious of a sizable payoff. "I don’t really think [the shares] are going to be worth that much," one Uber driver who also drives for Juno told BuzzFeed News, noting that after seven years, Uber still has not gone public. “What about when they take investors," he asked.
But before it even thinks of penning an IPO prospectus, Juno must first establish itself in a market dominated by well-entrenched rivals like Uber and Lyft. In its launch market of New York City, competition is particularly brutal. There, Uber and Lyft seem perpetually locked in promotional price wars, slugging it out even as Manhattan’s legendary Yellow Cabs continue to do good business. Indeed, according to recent data published by New York City’s Taxi and Limousine Commission, the city saw 11.1 million taxi trips during the month of April. That's about 400,000 trips per day.
And the competition against which Juno pits itself is as well-funded as it is fierce. With a valuation of roughly $68 billion, Uber sits atop a pile of funding worth about $15 billion. And Lyft has raised more than $2 billion in funding at a $5.5 billion valuation. Meanwhile, Juno has raised an undisclosed sum from friends and family, according to Marco, who cofounded the messaging app Viber and sold it to Rakuten in 2014 for $900 million. He declined to comment on a TechCrunch report that the company is talking to investors about a $30 million funding round – money that could be used to help the company expand. He also declined to say what cities is considering expanding to after New York.
Muhammed Barlas, an Uber driver who now also drives for Juno and organizes for the Independent Driver’s Guild in New York, told BuzzFeed he recently attended a meeting at Juno’s 1 World Trade Center offices that was “packed” with drivers. “They’re promising a lot of things,” he said. But does he think Juno will ever realize its IPO aspirations? Barlas seemed hopeful. “Maybe — if they keep promises to the drivers," he said.
Another Uber driver who also drives for Juno sounded an equally upbeat note, though he too said he's not expecting any big windfalls. "It’s a nice offer," he said. "But I don’t think anyone’s going to retire off of it."
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