These are just some of the key findings from Stash’s October Gig Economy survey, which polled 1,240 customers who identified themselves as working in the gig economy.¹

While 90% of those surveyed said they lack access to traditional employer benefits such as health care, access to retirement accounts, and paid time off, only 12% said they were dissatisfied with their employers.

A resounding 57% of respondents said they were either very satisfied or somewhat satisfied with their employers. About one third were neutral.

Despite positive employer sentiment, the survey found that lack of access to employee benefits may leave gig workers uniquely vulnerable to financial instability. Since becoming gig workers, more than half report having to borrow or sell off assets to pay for emergency expenses. Similarly, 28% have had to tap into savings “too many times to count” to pay for such emergencies. Meanwhile, more than a quarter say they are not actively building an emergency fund, and nearly half say they are not actively saving for retirement.

Who are gig workers?

Gig workers are typically classified as contract workers who perform specific tasks for short periods of time, and they have usually lacked the protections and agreements that full time and salaried workers have with their employers. Many gig workers staff the new economy of app-based, on-demand service businesses, including Lyft and Uber, Postmates, Grubhub, TaskRabbit, and Instacart, while others freelance or work as contractors across different business sectors.

By the numbers, more than a third of respondents work in the transportation and delivery industry, which can include driving for companies such as Uber and Lyft. Six percent work in retail, while 4% work in technology, and 2% work in construction, among other categories.

Roughly 48% identified as male, and 51% female. The remainder identified as other.

Nearly half of those surveyed earn less than $50,000 annually.

A national debate about worker rights

The findings come as national protests of Uber and Lyft heat up, with drivers reportedly organizing into a labor movement, advocating for better working conditions, increased pay, and access to employee benefits. Concerns that a new California law aims to directly address.

The law, called Assembly Bill 5, says contract workers—including janitors, many construction workers, beauticians, and drivers—must now pass something called the ABC test, in which employers must prove their employees are not central to the way they do business. Companies must also prove that their contractors are independently established in a trade or occupation that’s the same as the work they do for the company that hires them for contract work.

Workers classified as contractors are typically not covered by a wide swath of employee laws, including minimum wage, unemployment, and disability insurance, sick leave and discrimination protections, according to sources. Assembly Bill 5 aims to change this.

The law is slated to go into effect on January 1, 2020, although Uber, Lyft, and other companies are exploring ways to fight the new law.

How to start saving for your future today

Whether you work in the gig economy or not, there are steps you can take today to help reach your goals and find financial freedom. If it’s an emergency fund you’re after, start by putting small amounts of money away each month—maybe $20 or $50, more if you can. If you can automate your savings, even better.

Once you’ve built up your emergency fund, you may be in a position to pursue other goals, like saving for retirement, your child’s education, a house, and more.

And most importantly, you’ll know that if things go wrong, you’re covered.

The post Stash Surveyed Gig Economy Workers: Here’s What We Found appeared first on Stash Learn.

This week, legislators in the country’s most populous state passed a law that stipulates many contractor workers in new economy jobs are actually employees of the companies they work for.

That means that all the Uber and Lyft drivers, Postmates and Grubhub delivery people, those who hustle you to and from the airport and bring groceries and dinners to your doorstep, eventually could be compensated like regular employees.

The ABCs of AB5

The law, called Assembly Bill 5, says contract workers must now pass something called the ABC test, in which employers must prove their employees are not central to the way they do business. Companies must also prove that their contractors are independently established in a trade or occupation that’s the same as the work they do for the company that hires them for contract work. The law is slated to go into effect on January 1, 2020.

What is a gig worker?

Gig workers staff the new economy of app-based, on-demand service businesses, including Lyft and Uber, Postmates, Grubhub, TaskRabbit, and Instacart, among others.  Gig workers are typically classified as contract workers who perform specific tasks for short periods of time, and they have usually lacked the protections and agreements that full time and salaried workers have with their employers. Many of the gig economy companies are based in California.

Generally, the legal argument of AB5 is that gig workers are not true freelance contractors, as their livelihood depends on the company that has hired them to do the contract work. Further, gig workers tend to be indirectly managed by the companies they work for, and much of the business model of a gig economy company depends on having access to a cheap and flexible contract workforce, among other things.

Drivers for rideshare companies in numerous cities, for example, have attempted to organize for higher wages and greater employee protections.

The U.S. Bureau of Labor Statistics estimates that as many as 6 million people may work in the gig economy. Uber, in its IPO filing, says it has nearly 1 million drivers on its platforms.

Why is this important?

Workers classified as contractors are not covered by a wide swath of employee laws, including minimum wage, unemployment, and disability insurance, sick leave and discrimination protections, according to sources.

Many new economy businesses, particularly those in the tech industry, depend on a steady stream of cheap contract workers to make their business run. Businesses say making contract workers employees could add as much as 30% to costs.

Both Lyft and Uber, for example, have said in their recent IPO filings with the SEC (here and here) that their business models would be threatened if its drivers were classified as employees, instead of contract workers. Both companies are likely to fight the new law in the coming months, according to reports.

Ripple effect

In addition to ride-share drivers and delivery workers, the law could apply to any contract worker in jobs as varied as construction, construction, healthcare, trucking, janitorial services, nail salons, adult entertainment, commercial fishing, and newspapers, according to the Los Angeles Times.

Will this affect me?

New regulations can be good for consumers and workers, ensuring safer products and fairer wages for workers, for example. If you’re a gig worker in California, for example, you’re likely to have new protections and rights under the law.

But they can also affect the growth prospects of some businesses, making it more expensive for them to operate. Lower growth might also affect the stock prices of public companies subject to the new law.

The post How CA’s New Labor Law Could Hit Uber and Lyft appeared first on Stash Learn.

After plenty of hype, suggesting Uber’s IPO would be one of the largest in a decade, the company’s stock fell 7% from its offering price of $45 on its first day of trading on May 10, 2019.

It is trading at about 9%  below its opening price as of Wednesday, May 15.

And that’s not all. By the end of its first trading day, Uber’s valuation stood at $76 billion, far below its initial estimate that it could reach as high as $120 billion, according to reports.

In that regard, what’s going on with Uber is similar to what happened to its rival Lyft after its own IPO. Lyft’s stock price is currently 26% below the high range of its opening price of $72 since the end of March. And it’s current valuation of $15 billion is about a third lower than the valuation Lyft sought at the time of its IPO.

What happened?

It’s unusual for a company to stumble on its first day of trading, according to the New York Times. In the last 20 years, only 18 companies have seen their stock price fall in their public offerings.

Uber’s value may have been set too high, according to multiple reports. Uber spent more than a decade as a private company, with a value set by a small group of investors, and it never had to face the scrutiny of public markets.

Another theory is that Uber may have waited too long before going public, diminishing investor enthusiasm about the stock. Uber was founded by Travis Kalanick and Garrett Camp in 2009. It started out as UberCab in San Francisco, and then quickly moved on to other cities and countries, dropping “Cab” from its name in the process.

Over the last decade, the company has raised more than $24 billion in 22 rounds from venture capitalists.

The company, which allows customers to hail a ride by using an app that matches consumers with nearby drivers, is the dominant player in the ridesharing industry with about 70% of the market.

And there are other potential reasons for its stumble.

IPOs can be volatile

When a company has an IPO, it’s typical for a newly issued stock to be subject to significant increases and decreases, at least in the short run. That’s known as volatility. Volatility for the stock can be especially high in the first few months following an IPO, and so can the potential for short-term losses as a result.

Why? Investors, analysts, and other stock market participants are often uncertain about the prospects of a newly public company, and that can all factor into the share price. For example, investors typically want to know if a company is worth the valuation it achieved at the time of its IPO. They may also want to know if a company will be profitable in the years to come, or whether it will continue to have losses.

In Uber’s case, it had revenue of $11 billion for 2018, an increase of more than 40% compared to 2017. But Uber lost $1.8 billion in 2018, and it has reported operational losses of more than $13 billion since 2015.

Uber also listed in its summary of risk factors that expenses for operations were expected to increase considerably in the future, and that the company may never make a profit.

After an IPO, prices may fluctuate due to the expiration of something called a lock-up period, where company insiders such as employees sign an agreement that prohibits them from selling shares for a specified period of time. (In  Uber’s case, the lock-up is 180 days.) When lock-up periods expire, insiders can tend to sell their stock in order to realize profit, depressing the stock price in the process.

Other companies that saw big fluctuations in their stock prices following their IPOs include Facebook, Twitter, Alibaba, and Snap, to name just a few.

Do your homework

It’s important for investors to carefully examine any company whose stock they plan to buy. Remember, as a public company Uber is required to file paperwork with the Securities and Exchange Commission (SEC) on a regular basis, detailing its financial performance and providing other critical information about the company that investors will want to know about.

That information, which includes a company’s revenue, profits, and losses is available to the general public—meaning anyone can look at it.

You can find out more about the Uber’s lock-up period and other information about Uber by looking at its prospectus, a publicly available document on the Securities and Exchange Commission’s website EDGAR.

Follow the Stash Way!

Stash recommends following the Stash Way, which includes regular investing, diversification, and investing for the long term.

Investing for the long term can help insure that you aren’t locking in your losses due to short term fluctuations in the price of a stock.

And remember: All investing involves risk. It’s possible for stocks, bonds, and other securities to lose their value due to changing market conditions.

The post What Happened With Uber’s IPO? appeared first on Stash Learn.

The company, which allows customers to hail a ride by using an app that matches consumers with nearby drivers, is the dominant player in the ridesharing industry with about 70% of the market. It hopes to raise $10 billion in its initial public offering, according to its prospectus, or the paperwork it filed with the Securities and Exchange Commission (SEC).

Uber is also seeking a valuation of $91.5 billion, about three times that of rival Lyft, which went public on March 29, 2019. At that valuation, Uber’s IPO would be one of the largest in years, on par with e-commerce company Alibaba, and social media company Facebook, according to reports.

Its stock could range between $44 and $50 a share when it begins selling, according to experts.

Here are some more highlights from Uber’s IPO paperwork:

• Uber reported revenue of $11 billion for 2018, an increase of more than 40% compared to 2017.
• Uber lost $1.8 billion in 2018, and it has reported operational losses of more than $13 billion since 2015.

• Uber claims to conduct 14 million rides a day in more than 700 cities around the world.
• Uber drivers have made more than 10 billion car trips since the company launched in 2012.

Plenty of questions

• Uber listed in its summary of risk factors that expenses for operations were expected to increase considerably in the future, and that the company may never make a profit.
• Uber may price its shares at the low end of the spectrum, according to some analysts. By contrast, its rival Lyft had priced its IPO shares at the high end, only to see the stock price fall in recent weeks.
• Uber drivers in the U.K. and the U.S. are planning strikes, to push for better working conditions, including better wages and more regulated fares, according to reports.

More about IPOs

Following an IPO, a new stock can be subject to significant increases or decreases in market price. That’s known as volatility. Stock volatility can be particularly high in the first few months following an IPO and as a result, so can the potential for short-term losses. If you’re in this stock for the long haul though, it could be an opportunity for dollar cost averaging.

Oftentimes, fluctuations in price are due to the expiration of something called a lockup period—this is when company insiders, such as employees, sign an agreement that prohibits them from selling shares for a specified period of time. (According to Uber’s prospectus, the company’s lockup period is 180 days.)

When lockup periods expire, insiders tend to sell their stock in order to realize profit, sometimes causing the stock price to fall, or experience large changes in price in the process. You can find out more about the lockup period and other information about Uber by looking at its prospectus, a publicly available document on the Securities and Exchange Commission’s website EDGAR.

Remember the Stash Way—invest for the long-term, invest regularly, and don’t put all of your eggs in one basket.

More about Uber

Uber, was founded by Travis Kalanick and Garrett Camp in 2009. It started out as UberCab in San Francisco, and then quickly moved on to other cities and countries, dropping “Cab” from its name in the process.

Over the years, the company has raised more than $24 billion in 22 rounds from venture capitalists.

According to Uber’s prospectus, the company has expanded beyond ridesharing to develop additional businesses in bike sharing, scooter sharing, meal delivery, and freight logistics.

Uber’s growth has often been controversial, with problems related to background checks for its drivers, and pushback from metropolitan areas worried that Uber could be destroying the traditional taxi and black car businesses in those locales.

Big questions have also arisen about whether Uber fostered a culture of sexual harassment against women, according to reports.

Kalanick was forced to step down from the company in 2017.  Dara Khosrowshahi replaced him as chief executive officer.

The post Find out More About Uber’s IPO appeared first on Stash Learn.

Kalanick’s departure follows revelations that the rapid growth of the company often promoted a culture internally that harassed female employees, or that took short cuts that frequently ran the company up against regulatory issues in the 650 cities worldwide where the company is responsible for 40 million rides each month.

Uber, founded by Kalanick in 2009, now has a valuation approaching $70 billion–twice the market cap of car manufacturing giant General Motors.

Many analysts are hailing the decision, stating that Kalanick’s exit is necessary for the company to continue growing in a responsible fashion. This poses interesting questions for investors in companies–what happens when the founder is asked to leave?

Worries when a founder exits

Often company founders who build the brand are necessary for the company’s success, or they’re synonymous with it. Think of Warren Buffett and Berkshire Hathaway, or Steve Jobs and Apple.

In fact, Apple’s board of directors ejected Jobs in 1985, for being headstrong and impulsive, and soon after the company that created MacIntosh computers was hit with sagging sales.

Jobs’ return in 1997–as a much-chastened executive who focused on leading the company–corresponded to the company’s current heyday as one of the most valuable companies in the world.

More recent examples include Spencer Woodman, the founder of high performance video camera GoPro. In that company’s annual report, it says much of the company’s growth depends on Woodman maintaining his leadership role there.

Start-ups and culture: It matters

In early days, tech startups often succeed because they’re founded by people willing to take risks and push the envelope in a particular sector or industry

A company with a small team may be able to get by with a “whatever it takes” attitude in order get a great product or service out into the world. But this can cause big problems when and if it adds hundreds (or thousands) of employees or goes global — which can lead  to harassment, poor workplace morale and lack of oversight among teams.

“It’s critical for a growing start-up to create a culture of accountability from the very beginning,”  says Stash co-founder and chief executive Brandon Krieg. “What employees want is to do a great job in a great company and feel safe when they come to work.”

Key Takeaways

When it comes to understanding public reaction to Kalanick resigning from Uber, here are some things to keep in mind:

• Uber is still a private company. Unlike Apple or Berkshire Hathaway, you can’t buy or sell its stock in the public markets. Nevertheless private companies can still have private shareholders who own shares of the company.
• All corporations, whether they’re private or not, are required to have a board of directors. The board is responsible for representing the shareholders, overseeing corporate policies including enforcement of regulations forbidding harassment, as well as hiring and firing executives.
• Uber is not the only Silicon Valley tech company that has had difficulties with workplace and regulatory issues in recent  years. Others include the human resources outsourcing firm Zenefits, and consumer products company Quirky, which filed for bankruptcy in 2015.

Keep Reading: Warren Buffett: Hits, Misses and the Future of Berkshire Hathaway 

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