Uber, Lyft stocks in focus after court strikes down California ruling

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 Uber, Lyft stocks in focus after court strikes down California ruling
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Highlights

  • Alameda County Judge ruled that California’s Proposition 22 ruling is unconstitutional.

  • Uber Technologies, Inc. (NYSE: UBER) stock was up 0.24% at 9:55 am ET.

  • Lyft, Inc. (NASDAQ: LYFT) stock was down 0.35% at 9:54 am ET.

Stocks of Uber Technologies, Inc. (NYSE: UBER) and Lyft, Inc. (NASDAQ: LYFT) were in focus on Monday after a California judge ruled that Proposition 22, a ballot measure that rejects drivers' right to be accepted as workers, is unconstitutional.

On August 20, Alameda County Superior Court Judge Frank Roesch ruled that Proposition 22 defies drivers' right to be accepted as workers by these companies, noting that the compensation law guarantees their right to minimum wage and other benefits. 

Proposition 22 or the ballot measure wants to treat the ride-hailing drivers as independent contractors and not employees, he noted, adding that the measure contravenes the state's legislative powers in determining the workplace standards, Reuters reported.

Friday’s ruling is a major triumph for the gig workers. In November 2020, the gig economy or the flexible work contract companies had cheered the California administration’s verdict in favor of Proposition 22.

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Uber Technologies, Inc.

The Uber stock was trading at US$40.045, up 0.24%, at 9:55 am ET after the verdict on Friday. The company has a market capitalization of US$75.28 billion.

UBER’s revenue for the June quarter of 2021 was US$3.93 billion compared to US$1.91 billion in the previous year. The net income was US$1.14 billion or US$0.58 per share diluted against a net loss of US$1.78 billion or US$1.02 per share diluted in the June quarter of 2020. 

The technology company provides a platform to match riders with drivers, restaurants with people who want food, and shippers with the carriers.

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Source – pixabay

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Lyft, Inc.

LYFT stock was priced at US$45.73, down 0.35%, at 9:54 am ET. Its market capitalization is US15.3 billion. LYFT’s earned revenue of US$765 million in the June quarter of 2021 compared to US$339 million in the previous year’s corresponding quarter.

The net loss was US$252 million or US$0.76 per share diluted compared to the net loss of US$437 million or US$1.41 per share diluted in the June quarter of 2020.

The company provides services in the US and Canada through its online and mobile platforms, which connects drivers with riders, and peer-to-peer ridesharing.

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Bottomline 

UBER and LYFT use a business model that connects drivers and food providers with their customers. While the debate over workers’ rights continues in the political circles, all stakeholders, including the businesses and gig workers, must find an amicable solution in context with the labor law.

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