New Labor Laws Could Drag Uber/Lyft Even Further


New labor laws are putting more pressure on rideshare companies.

New laws in New Jersey, New York, California, and Washington are adding to the pressure mounting on companies in the rideshare industry, according to Fortune.

Uber and Lyft have yet to generate profits and their stocks have trended downward since their highly anticipated IPOs. Lyft shares are down 36.82 percent since March, while Uber is down 37.55 percent since May.

Regulation has been one of the many things that have dragged the two popular ride-sharing companies down. Bills requiring the companies to treat drivers as employees instead of independent contractors would increase costs, prices, and decrease usage.

In Seattle, the city council unanimously passed legislation that designates a minimum wage for Uber and Lyft drivers and raised the tax on rides to pay for city programs.

"I think the share prices to some degree are assuming somewhat of a benign outcome in 2020," said Rohit Kulkarni, capital markets analyst at MKM Partners. "If a year from now we're starting at a crossroads where Uber and Lyft are looking to hire tens of thousands of drivers as employees, that scenario I think is not priced into the stock."

Uber and Lyft were founded on the concept of independent contractors instead of employees, but regulation from states is adding to the pressure the companies already face.

View the Full Story Here.


Economics, Finance and Investing