Juno Threatens Uber By Offering Equity To Drivers

Juno offers its shares to Uber drivers to attract human capital towards itself.

By offering better equity and rates, cab service providers can attract driving partners. This is the strategy of the most high profile and newest challengers of Uber, start-up Juno aims to introduce a competing cab service in New York soon.

CEO and Founder of Juno and co-founder of Viber, Talmon Marco, said the company is specifically aiming at Uber driving partners and providing them a better deal with low commission rates in the organization.

Several drivers in some of the biggest US Uber markets, including San Francisco and New York, have launched protests over cuts in fare in January 2016, claiming that decreases in fare adversely affect their take-home wages. The main rival of the company, Lyft, in the United States has attracted drivers with the help of its lower commissions and tip system for full-time drivers.

Recently, Travis Kalanick’s company altered its commission model to mirror that of Lyft in providing rewards to full-time drivers. Increasing efforts for unionization are focused on drivers. A law was revealed in the legislature of California, which if ratified, would allow drivers of Lyft and Uber to establish unions. The City Council of Seattle took a similar step in 2015, although it is challenged by litigation.

Mr. Marco told that Juno would classify drivers as workers. It will not classify them as independent contractors if they exclusively drove for Juno. He proposed to distribute stakes in Juno to drivers every quarter to ensure that they establish equity like their founders with time. Nevertheless, the New York transportation market is quite competitive and at least one ride-sharing company, Hailo, has entered recently.

Mr. Talmon said, “Every time that either Uber or Lyft reduce their prices, it is a war that is fought on the back of drivers.” Juno is particularly hiring Uber drivers. Its requirement for joining includes drivers with high ratings from Uber users. The organization is currently paying some driving partners to get permission to acquire data while they complete their Uber journeys.

Mr. Marco did not reveal how much his company has raised up till now, saying only that it was in millions. Uber refused to share its views. The company previously stated that there has been an increase in the gross fares by $13 from 2012 to 2015.

Nevertheless, it has also raised its commissions during the period by making additions to fees by charging booking fees. The organization did not reveal how the net pay of drivers has changed.