Uber (NYSE:UBER)
As of 11:06 a.m. Eastern Time on Tuesday, Uber (NYSE:UBER) stock price was down 9%. The U.S. Department of Labor’s proposed rule change would essentially turn certain independent contractors into full-fledged employees of ridesharing businesses. Because of this, freelancers would be eligible for insurance and other perks. As a result, Uber Stock declined.
Over the last 12 months, Uber’s stock price has dropped by 47%. The announcement doesn’t help Uber’s profitability problems, which are already exacerbated by the company’s $10 billion in losses. Uber (NYSE:UBER) U.K. operations, which may make the company more competitive, has been mostly overlooked by the market.
What’s the Reason?
Since the start of the epidemic, there has been greater discussion on how to approach freelancers. In 2021, it was predicted that roughly 60 million individuals will have freelanced in some capacity. If the bill is passed into law, it might lead to price increases for ridesharing services like Uber and its competitor, Lyft. What happens to Uber’s cost structure and profitability under the new plan is the main source of anxiety among Uber Stock investors.
Uber drivers may use the IC+ model, which provides them with even more freedom and flexibility than a traditional independent contractor. CEO Dara Khosrowshahi said at an earnings conference that drivers desire the “freedom of independent contractor status together with perks, as well.” Already anticipating this shift in the law, Uber 2021 reclassified 70,000 of its drivers in the United Kingdom as employees.
What Should You Do Now?
The upper echelons of management don’t seem to be concerned. It sees positive trends in both regulatory and competitive environments. At the second quarter earnings conference, CEO Dara Khosrowshahi said that the Uber (NYSE:UBER) margins in the United Kingdom remain “solidly profitable” despite increased attempts to classify drivers as employees.
The announcement won’t have much of an effect on Uber Stock long-term growth. Because of its efforts to anticipate and prepare for regulatory changes, Uber will have a competitive advantage over similar businesses that do not provide as many perks.
Meta Description
If Uber’s success in the United Kingdom indicates anything, this development will not have any impact.
Featured Image – Megapixl © Mohammedsoliman4
Author Shariq Khan 
