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- New labor laws can affect Uber and other ride-sharing and delivery companies.
- The Flex Association has asked the deputy secretary to explain the implementation.
Ride-share and delivery companies, like Uber, want clarification regarding the incoming worker classification rule, which may disrupt operations. Founded in 2009, the San Francisco-based Uber Technologies Inc. provides mobility, food and package delivery services and freight transport. Uber seemed worried that the new labor laws might be disruptive and affect growth.
Uber Technologies Inc. and New Labor Laws
In October 2022, the Department of Labor proposed a rule limiting the company’s process of treating workers as independent contractors. As most ridesharing and delivery companies extensively use this module, this rule would upset the industries relying on gig workers.
The Flex Association, representing companies like Uber and Lyft, sent a letter to President Joe Biden on March 20, 2023, asking Julie Su, the deputy secretary for the US Department of Labor, asking her to explain how the proposed rules would be implemented in a “manner that protects independent work.”
Labor laws require companies to pay minimum wages and overtime pay to their employees, costing them 30% more than they pay to these independent contractors and gig workers.
Uber has already faced legal actions in some jurisdictions among the 72 countries and 10,500 cities, mainly due to their drivers’ classification as either independent contractors or gig workers. They have also been criticized for unethical practices, such as ignoring local laws and regulations.
Uber Technologies Inc. (UBER) – Numbers inspection
When writing, UBER was trading at $31.52 with a drop of 4.08%; previous close and open were at $32.86 and $32.58, respectively. At the same time, the fifty-two-week change was a drop of 9.16%. The market cap is $66.045 billion, and the analysts’ price target is $47.19, with an upside of 49.7%. Wednesday’s drop broke a two-day winning streak.
The year-on-year change concerning December 2022 data for some parameters are as follows: Revenue gained 48.19% from $8.61 billion, while revenue on assets and equity saw a drop of 3.33% and 76.62%, respectively. Operating expenses gained 5.98% from $2.84 billion, while the operating margin dropped by 5.75%.
The net profit margin was corrected by 55.20% from $6.91, and the profit margin dropped by 28.68%. Earnings per share fell by 10.48% from $0.57, while the revenue per share was $16.16. In comparison, the quarterly revenue growth was 49%. The next earnings report will be announced on May 3, 2023, with an estimated revenue of $8.64 billion.
Uber Technologies Inc. (UBER) – Candle Exploration
In the short term, UBER stock shows a bearish trend indicated by a downward-sloping trend line. There were some attempts in February 2023 to break the previous swing high at $34.00, but prices could not sustain their position. The overall result would have been positive if they remained above the blue line.
If the current rate breaks the trendline, it must also break the $34.00 mark. Doing so with confirmation candles should propel the rally. Entering the supply zone, or a clean breakout, depends on new labor laws and market sentiments. As the EMA goes sideways, and MACD is also indecisive, no clear indication can be made.
If labor laws have a negative effect and overall sentiments are pessimistic, a southward movement towards S1 is expected. It shall bounce from S1, but a negative sentiment could push it toward S2.
Disclaimer:
The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
