It’s been a rough year for Uber and Lyft. The COVID-19 pandemic, and the accompanying dip in people using rideshare services, cored out their respective businesses; and on top of that, they faced a serious legal threat from the government of California, which wanted both companies to classify drivers as full-time employees as opposed to contractors.
But on Election Day, California voters decided in favor of Proposition 22, which allowed the companies to continue classifying drivers as independent contractors. For the moment at least, that preserves the core of the Uber and Lyft business models.
With so many issues confronting these companies, it’s worth examining how much they pay their respective software engineers. Those engineers, of course, will determine whether those companies’ apps and services continue to deliver; depending on how the next few years ago, they’ll also have to build products that pull in new customers while keeping the existing ones happy. In other words, without that talent, these companies (and gig companies in general) are in very serious trouble.
The chart below represents the arc of software engineering careers at Uber. As you can see, stock becomes a progressively larger share of overall compensation as engineers progress in their careers:
Meanwhile, here’s Lyft. As with Uber, stock is an outsized percentage of the overall compensation package. This is a classic startup tactic, where you give big chunks of stock to technologists in order to bring them onboard and then retain them through challenging periods. In theory, lots of stock also makes employees more invested in the firm’s overall success, potentially compelling them to work harder.
Of course, relying on stock for a huge part of compensation means that employees’ take-home could swing wildly depending on how well the company is doing on the open markets. With Uber and Lyft trying to adjust to the current realities (as well as laying workers off), it’s an open question how their respective stock prices will fare—impacting how much the engineers at those companies will make this year.