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Uber Lawsuit Alleges Employees Were Misled On Equity Compensation (techcrunch.com)
An Uber employee has filed a lawsuit accusing the company of misleading employees about their equity compensation. Uber "devised a fraudulent scheme to recruit highly sought software engineers," according to the case. From a report on TechCrunch: The lawsuit claims that Uber promised a more tax favorable type of options at the time employees were hired and then later changed the plan. The case alleges that at least 100 others on the Uber staff may have been impacted and that these stock options can potentially be worth "hundreds of millions of dollars" to employees and also save Uber "millions of dollars of tax deductions." The plaintiff, Lenza McElrath, who was previously a lawyer and is now an engineer at Uber, says that he was under the impression that all his shares could be treated as ISOs, which do not require an upfront tax bill. He said he was later given a notice about a change to the exercisability schedule, that effectively turned most of his shares into NSOs, which are taxed at the time they are exercised. While many startups allow their shares to become exercisable over the course of a four-year vesting agreement, Uber has share agreements that become exercisable after just six months. In other words, Uber employees can buy the stock they are entitled to shortly after they gain employment.
A company that behaves in an unethical manner in the marketplace also deceives employees.
Who would have thought about that.
Now, I would get that they exercize their share options a lot sooner than most. So, I would think there would be a catch.
Uber lost 800 mil this quarter. They're projected to lose 2.6 billion next year. And that's not even accounting for cities turning on them and employees wanting proper compensation.
Uber is fucked. So go ahead, fight for your worthless equity.
You're saying that a company that is infamous for skirting the law and screwing people over is skirting the law and screwing people over?! How unpredictable! ;)
Anons need not reply. Questions end with a question mark.
Equity is the biggest scam there is, it's so easy to weasel out of. I only care about what you can pay me right now, not a bunch of empty promises.
You want a full time job being a taxi driver, go apply at a taxi company. Want to pick up a few extra bucks taking someone who happens to be going your way, then try Uber.
Short version: Uber is an extra money deal, not a job.
You might want to read the article or summary, this isnt about drivers its about developers.
An Uber employee has filed a lawsuit accusing the company of misleading employees about their equity compensation. Uber "devised a fraudulent scheme to recruit highly sought software engineers," according to the case. From a report on TechCrunch:
You might want to read the article or summary, this isnt about drivers its about developers.
Not sure why developers being thrown under a driver-less car is news. Must be a slow day.
You might want to read the article or summary, this isnt about drivers its about developers.
Not sure why developers being thrown under a driver-less car is news. Must be a slow day.
They let Steve Balmer in for an hour. https://www.youtube.com/watch?v=Vhh_GeBPOhs
Equity is the biggest scam there is
If you work for someone trustworthy, equity is a gamble that can pay of bigly. Particularly ISOs subject to an 83(b) election.
You're saying that a company that is infamous for skirting the law and screwing people over is skirting the law and screwing people over?! How unpredictable! ;)
But were they infamous for that when they were hiring the early-hire developers in question? Or did they only develop the reputation AFTER the developers had built the platform and the executives used it in ways that screwed over the "line workers".
Hindsight is 20/20. How were the engineers hired to build the infrastructure to know, at the time, that they were going to be shafted in a way even the early-hire shafting executives of most Silicon Valley startups would never dare? This strikes at the fundamental draw for engineer hiring for startups. If it becomes common practice, the startup-driven innovation cycle could collapse. Uber needs a big, public, spanking over this, to nip it in the bud.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
Well boo-hoo. Dude doesn't want to pay his taxes early. Cry me a river.
But were they infamous for that when they were hiring the early-hire developers in question?
If they are unethical scumbags now they probably were back then too. We just know more about it now.
The plaintiff, Lenza McElrath, who was previously a lawyer and is now an engineer at Uber, says that he was under the impression that all his shares could be treated as ISOs, which do not require an upfront tax bill. He said he was later given a notice about a change to the exercisability schedule, that effectively turned most of his shares into NSOs, which are taxed at the time they are exercised.
I must be misunderstanding something. "Does not require an upfront tax bill", to me, sounds exactly like "taxed at the time they are exercised". Because calling something an "upfront" tax bill, to me sounds like something that would come before exercising those options.
White people problems.
You want a full time job being a taxi driver, go apply at a taxi company.
At least in America, most taxi drivers are either self-employed or contractors that either own their taxi or lease it on a per-shift basis. Few taxi drivers are W2 employees.
Uber is an extra money deal, not a job.
That is true for drivers, most of whom work part-time. But if you read the summary (or even the headline) you will see that this is not about drivers. It is about programmers, who are full time employees.
The lottery is also a gamble that can pay off bigly. But I wouldn't recommend it as a career.
TFA makes it sound like this guy made an assumption before he got anything in writing and is suing because the writing didn't match his assumption. If other people also feel they were mislead, it would be interesting to hear about that.
The lottery is also a gamble that can pay off bigly. But I wouldn't recommend it as a career.
I can't influence the outcome of the lottery; but I and my fellow equity-holding colleagues can influence the outcome of our equity, and we are strongly incentivized to do so. Which is a large part of equity's value. It's a calculated risk, and characterizing equity as "the biggest scam there is" is shortsighted and ahistorical.
So few software engineers seem to know about early exercise and 83(b) that I have ended up having to make it part of my negotiation demands -- successfully, but it's more painful as the lawyers need to get involved.
In one case, they insisted I meet with the company's lawyer (from a firm, not on staff) just so the lawyer could tell me about the "risks" of early exercise and 83(b) -- of course with the disclaimer that "we are the companies lawyer, not your lawyer and we recommend you consult a qualified tax attorney and accountant". I assume the intent was to give the company a defense if I later sued them with "I'm just a country programmer, I didn't know anything about those fancy techniques like early exercise and filing my paperwork correctly to take advantage of the 83(b) option so I'm suing you for [additional taxes and penalties I owe because I filed my paperwork with the IRS three days too late and didn't realize it mattered] or [the value of the restricted shares that the company held back and repurchased from me at what I paid because I didn't understand what the repurchase right was in shares I was not yet vested in, I thought I owned them] or (less likely as it's hard to get blood out of a stone) [the amount of tax benefit I would have received, but did not, from being able to write off my investment in the now worthless shares].
I suppose the lawyer thing was a backlash from all the idiots whining about taxes on their unrealized gains back in the .com bust. (Which amused me -- don't people research anything? That risk wasn't hidden and was well understood.)
Have you checked the small print? You might have a lot less influence than you think if you own a different class of shares to the founders, who can issue more whenever they feel like it.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."