|Bid||46.10 x 1300|
|Ask||46.15 x 1100|
|Day's Range||46.02 - 46.99|
|52 Week Range||43.41 - 88.60|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||73.22|
Digital disrupters may be right that employment law needs an update. does not automatically mean that will change workers’ status from contractors to employees. Instead, it expands on a previous Californian Supreme Court decision on labour rights, making it more difficult for employers to prove workers are independent contractors.
The group said on Friday that it would reduce Mr Neumann’s outsize control of the company by cutting his voting rights from 20 votes a share to 10 and cancel the supervoting shares entirely in the event of his death. The governance changes, however, still keep WeWork firmly under Mr Neumann’s control, the filing noted. WeWork also said no member of Mr Neumann’s family would sit on the board and it removed the role of his wife, Rebekah, in choosing a successor in the event of his death.
California businesses that rely on independent contractors are facing some fundamental changes to their operations this week after state legislators passed AB 5. AB 5 next makes its way to the desk of Gov. Gavin Newsom, who is expected to sign it as early as Friday, when the state legislative session ends. Prominent tech companies such as ride-hailing giants Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT) and delivery app DoorDash have emerged as poster children in the fight against the legislation — all Bay Area companies, but with antecedents in Southern California — pledging $90 million to oppose the bill on 2020 ballot.
Shares in Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) continued their recovery early Sept. 13, despite passage of a California law classifying its drivers as employees, not contractors. Uber's Chief Legal Officer Tony West shrugged off the news, saying drivers aren't even "core" to Uber's business.Source:vaalaa / Shutterstock.com Uber and Lyft have been lobbying heavily against the bill, called Assembly Bill 5, since it was introduced. They have even promised a referendum campaign against it, putting a repeal on the 2020 ballot.Uber and Lyft aren't making money even as they deny drivers the usual benefits of employment. Losses have increased as the two companies have scaled. I have written that Uber is barreling toward worthlessness.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe new bill, if signed into law by California Governor Gavin Newsom, may just hasten the inevitable. The Bill's Threat to Uber StockThe business model of Uber and Lyft has always been based on flexibility. But the requirements for driving -- a license and simple background check -- don't guarantee safety. Since the drivers are contractors, the companies deny responsibility for incidents, which has led to lawsuits. * 7 Discount Retail Stocks to Buy for a Recession AB5 bill codifies an "ABC Test" for determining whether workers are employees or contractors. Contractors would have to be free of the employer's control and direction. They would have to be working outside the normal course of the company's business. The work would also have to be outside the worker's normal occupation.West said in his press conference Uber can show its drivers meet that test and thus aren't employees. Then how can Uber guarantee rider safety?This has always been the problem with gig-economy jobs. There's no worker protection, so drivers don't get Social Security, health insurance, paid sick days, workers' compensation or overtime. There's also no consumer protection. Miriam Pawel of The New York Times says AB5 calls that arrangement feudalism. Limited JurisdictionAB5 only applies to California.The National Labor Relations Board has ruled that, as a matter of federal law, Uber and Lyft drivers are contractors. A judge has agreed, although drivers are appealing. A new class action suit, based on AB5, was filed in federal court Sept. 12.With an unemployment rate of 3.7%, and even many fast food jobs paying over $15 per hour, it's surprising that Uber and Lyft can get enough qualified drivers to meet demand.Uber and Lyft get around consumer protection by looking the other way. They fight against stronger checks before courts and regulators and take their lumps when they lose. This Is a Global StoryUber's efforts to expand globally have run into stiff resistance in Europe. The company sold its business in Asia but is gaining some traction in Africa.The best-performing units of Uber appear to be Uber Eats (its food delivery service) and Uber Freight (which links trucks with freight loads). Both were specifically excluded from a recent Uber layoff, where 435 people, 8% of the workforce, went out the door. The Bottom Line on Uber and Lyft StockUber next reports earnings Nov. 7. Analysts are expecting a loss of about $1.4 billion on revenue of $3.7 billion. Lyft reports Nov. 6 and is expected to report a loss of about $450 million, $1.60 per share.The original vision for Uber may just not work. But if Uber Freight can arbitrage trucking rates, and Uber Eats gains traction, the company could use that success to find a business model that does work.It needs to, because investors are rapidly losing patience. Even with recent gains Uber stock remains 18% below its initial trade in May, and Lyft is now 40% below its initial trade in April. The meter is running on both companies, and time is running out.Dana Blankenhorn is a financial and technology journalist. He is the author of the mystery thriller, The Reluctant Detective Finds Her Family, available at the Amazon Kindle store. Write him at firstname.lastname@example.org or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this article. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post California Law Puts Uber Stock Under Threat appeared first on InvestorPlace.
Discover why these gig-economy stocks have suffered recent losses but may turn around. Employ these trading tactics to catch a ride higher.
Presented by Winston & Strawn LLP and ICR Inc. While Wall Street groaned over the struggles of Uber Technologies, Inc., Lyft, Inc., and WeWork parent The We Company in recent months, a cousin of the traditional IPO has flourished, often delivering a healthy exit for private owners and strong aftermarket trading for public […]
Uber, Lyft, DoorDash, Postmates, Instacart and gig economy pioneer TaskRabbit are among the high-profile Bay Area gig economy companies that face potential investor backlash under Assembly Bill 5.
An Uber driver in California is wasting no time seizing upon a new law passed by the state legislature Wednesday that could reclassify ride-hailing drivers from independent contractors to employees.
Ah, the startup mania. This market cycle has seen a flood of "unicorns" and other venture-backed companies capture investor attention like Pets.com and other startups did in prior bubble periods. The current drama surrounding WeWork's efforts to go public is a perfect example of a company that at the core is a boring sub-leasing provider but has dressed itself up.Give me a break.These companies are largely not profitable, are burning cash badly and have been focused on razzle-dazzle more than anything. Now, these recent IPO stocks are filtering under the intense scrutiny that the public markets bring. Here are seven that are suffering.InvestorPlace - Stock Market News, Stock Advice & Trading Tips IPO Stocks: Uber (UBER)The biggest of the venture-backed companies to go public this cycle, Uber (NYSE:UBER) shares are languishing beneath their IPO price and look headed for further losses as California passes legislation, headed to the governor's desk, that would force the company to classify its drivers as employees rather than independent contractors. The company will next report results on Nov. 7 after the close. Analysts are looking for a loss of 82 cents per share on revenues of $3.7 billion. Lyft (LYFT)Lyft (NASDAQ:LYFT) shares are also suffering, down by roughly 50% from the company's post-IPO high and crushing through its prior lows set in May. While the company beat arch rival Uber to IPO, both are locked in a seemingly endless cash burn cycle. The company will next report results on Nov. 7 after the close. Analysts are looking for a loss of $1.67 per share on revenues of $912 million. Slack (WORK)Shares of Slack (NYSE:WORK), the provider of an instant messaging system for corporate settings (which is basically a huge time waster) are in a post-IPO free fall, down nearly 40% from the post-IPO high. Worries are surrounding the company, likely due to competitive pressure from Microsoft (NASDAQ:MSFT). The company will next report results Dec. 3 after the close. Analysts are looking for a loss of 8 cents per share on revenues of $155.7 million. Spotify (SPOT)Shares of Spotify (NYSE:SPOT), the music service that had a unique direct listing IPO with lots of hype, is once again trading below its 200-day moving average and is down more than 30% from its all-time high as investors continue to worry about competitive pressures from the likes of Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL). The company will next report results on Oct. 31 before the bell. Analysts are looking for a loss of 32 cents per share on revenues of $1.9 billion. Fiverr (FVRR)Fiverr (NYSE:FVRR), another gig-economy icon, is watching in horror as its share price continues to drop after reaching a post-IPO high of more than $44. As the job market tightens and the freelance economy loses its luster, FVRR stock has fallen by more than 50%. The company will next report results on Nov. 11. Analysts are looking for a loss of 19 cents per share on revenues of $26.1 million. CrowdStrike (CRWD)CrowdStrike (NASDAQ:CRWD), a developer of cloud-based security systems that protects corporations and was founded by former McAfee employees, is seeing its share price drift down to its post-IPO lows. The company will next report results on Dec. 5 after the close. Analysts are looking for a loss of 12 cents per share on revenues of $118.9 million. Concerns center on the company's lack of profitability and trying valuations. Stitch Fix (SFIX)The clothes-in-a-box purveyor Stitch Fix (NASDAQ:SFIX), which went public back in 2017, continues to languish badly as investors realize the company lacks pricing power and is under constant threat of attack from Amazon's efforts in the fashion space. The company will next report results on Oct. 1 after the close. Analysts are looking for earnings of 4 cents per share on revenues of $432.4 million. Keep an eye on active client growth, which turned lower.As of this writing, William Roth did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post 7 Recent IPO Stocks That Are Melting Down appeared first on InvestorPlace.
2019 has been a big year for initial public offerings. The year saw the arrival of some of the most anticipated IPO stocks in years, among them Uber (NYSE:UBER) stock.Indeed, it's possible that 2019 will set a record for the most capital raised, topping the $97 billion raised in 2000. WeWork and Peloton are among the well-known companies likely to go public before year-end.That said, post-IPO performance has been mixed. UBER stock, most notably, has been a flop. On the other side of the coin, a food-tech play has been one the best performers of all time, at least in the early going.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Battered Tech Stocks to Buy Now What matters at this point, of course, is not how these IPO stocks have traded so far -- but how they'll trade going forward. In some cases, big gains should continue. In others, early stumbles might look like a buying opportunity -- or a worrisome omen. After all, in many ways the IPO is the easy part. It's keeping investor attention after the offering that can be much more difficult. IPO Stocks: Uber (UBER)Source: NYCStock / Shutterstock.com Uber's IPO got off to a rocky start: Its $45 IPO price gave way almost instantly.UBER stock managed to grind back to those levels on a few occasions. But a disappointing second quarter earnings report last month sent shares tumbling. Uber stock neared $30 late last month before a recent bounce.The performance might be even worse than a 29% decline from the IPO price suggests. Uber executives reportedly wanted a $120 billion valuation ahead of the offering. The company's current market capitalization is less than half that.As I wrote last month, whether UBER stock can rebound likely comes down to one key factor: investor trust in the business model. It might seem stunning given the $58.6 billion valuation, but many investors still believe that the Uber business model will never be consistently profitable.The argument is that Uber simply has bought its growth through driver and rider incentives. To become profitable, those incentives will have to go away. But if and when those incentives go away, Uber's driver and rider pools both shrink.From that standpoint, the cheaper Uber stock price doesn't change the case all that much. If the model works -- if Uber can truly revolutionize not only the taxi industry, but food delivery and even freight -- UBER stock probably rises. If it doesn't, the stock would plunge.It's hard to know for certain which scenario plays out -- but one can at least reasonably assume that Uber stock is going to make a big move going forward. Lyft (LYFT)Source: Tero Vesalainen / Shutterstock.com For Uber's ride-hailing rival, Lyft (NASDAQ:LYFT), post-IPO trading hasn't been much better. LYFT, too, quickly dipped below its IPO price of $72. Like UBER stock, it touched an all-time low last month. And at least relative to its initial price, LYFT has underperformed, declining 38% against Uber's 29%.The broad question about the viability of the ride-hailing model obviously applies to Lyft as well. But there are two key differences in the stories.First, Lyft remains much smaller. Its revenue in the June quarter was less than one-third that of Uber. Of course, that may not necessarily be a bad thing. Lyft clearly has gained market share over the past few years, helped in part by the scandals at Uber. Continued share gains give Lyft a path to better growth going forward than Uber -- and potentially quicker profitability. * 10 Stocks to Sell in Market-Cursed September Second, Lyft doesn't have a delivery business, as Uber does with UberEats. And that might be a weakness, given investor hopes for UberEats rivals like DoorDash and GrubHub (NYSE:GRUB).Meanwhile, LYFT stock still trades at a premium to UBER stock on a price-to-revenue basis. That seems a bit surprising. Investors right now are pricing in further market share gains for Lyft, no matter how the actual market plays out. If Lyft disappoints on that front, the declines could continue. Chewy (CHWY)Source: designs by Jack / Shutterstock.com To some investors, online pet food retailer Chewy (NYSE:CHWY) looks a lot like UBER stock. Yes, growth has been impressive: 2018 revenue was eight times that generated just three years earlier.But, like Uber, bears argue that Chewy simply is creating unprofitable revenue. Indeed, well-known investor David Einhorn compared CHWY stock to that of Pets.com, one of the most infamous of the dot-com bubble stocks.That comparison seems unfair, however. Pets.com generated less than $6 million in revenue in 1999, and was bankrupt just a few months later. Chewy is on track to bring in almost $5 billion in revenue this year, has plenty of cash on the balance sheet and is tracking toward EBITDA profitability.A valuation of $13 billion-plus admittedly is concerning, particularly given that PetSmart paid one-quarter as much to acquire Chewy a little over two years ago. But as a satisfied Chewy customer, I see growth continuing and profitability arriving. If that's the case, CHWY's post-IPO sideways trading should turn into upside soon enough. Levi Strauss (LEVI)Source: Davdeka / Shutterstock.com Denim manufacturer Levi Strauss (NYSE:LEVI) returned to the public markets this year for the first time since 1985. But, at least so far, early returns have been disappointing.LEVI stock got off to a nice start, gaining 32% in its first day of trading in March. But a disappointing fiscal Q2 report undercut the stock. Friday's close of $17.08 leaves LEVI almost exactly even against its IPO price of $17.Near the lows, there's admittedly an intriguing case for LEVI stock. A forward price-to-earnings ratio of just 15.9 leaves valuation reasonable. Growth has been impressive in recent years. Denim demand seems to be holding up well, given results from the likes of American Eagle Outfitters (NYSE:AEO) and Wrangler owner Kontoor Brands (NYSE:KTB), a spinoff of V.F. Corporation (NYSE:VFC). * 7 Stocks to Buy In a Flat Market The worry, however, is that Levi's strong results heading into the IPO aren't sustainable, as a turnaround effort largely is complete. The company still has a big retail business at a time when investors want no part of retail. LEVI looks intriguing here -- but it's tough to argue that it looks compelling. CrowdStrike (CRWD)Source: Piotr Swat / Shutterstock.com Shares of cybersecurity company CrowdStrike (NASDAQ:CRWD) are heading in the wrong direction. Like so many tech IPO stocks in recent years, CRWD got off to a hot start, peaking at just shy of triple its IPO price of $34.The stock now has given back about a quarter of its value, however. Earnings and guidance both looked strong in last week's fiscal Q2 report, but the stock slid anyway.It's likely valuation is a factor. After all, this is a stock trading at roughly 40x this year's revenue guidance, even backing out cash. That's one of the highest figures in all of tech (though not, as we shall see, the highest).That said, investors have been rewarded in this market for focusing on growth over valuation. And CRWD now is back toward levels seen before its first-quarter report. In that report, too, CrowdStrike beat estimates and gave above-consensus guidance. CRWD stock jumped 15% on that release. Why sentiment has reversed isn't necessarily clear -- but if and when it turns back, CrowdStrike stock will be one of the better growth stocks out there. Zoom Video Communications (ZM)Source: Michael Vi / Shutterstock.com The story at video communications provider Zoom Video Communications (NASDAQ:ZM) sounds awfully like that of CrowdStrike.Zoom went public two months earlier, and its shares, too, initially soared. In fact, just like CrowdStrike, its stock stopped just pennies shy of tripling. CRWD since has fallen 25% from its highs; ZM stock has dropped 20%.Like CrowdStrike, strong fiscal Q2 earnings from Zoom Video last week were met by investor selling. ZM stock fell 8% on Friday, the day after its earnings release. And like CrowdStrike, the stock still looks dearly valued. ZM trades at an almost unfathomable 45x the FY20 consensus revenue estimate. * 7 Best Tech Stocks to Buy Right Now Where does Zoom go from here? It seems likely that, at least in the near term, it's going to be market factors that answer that question. As I wrote in April, ZM truly is the perfect stock for this tech market. Growth is enormously impressive, the opportunity is huge, and yet the valuation seems to incorporate all of the good news. As long as investors will keep paying up for growth, ZM stock can rebound. If and when valuation concerns arrive, however, ZM is one of the stocks most likely to crash. Luckin Coffee (LK)Source: Keitma / Shutterstock.com China's Luckin Coffee (NASDAQ:LK) has been one of the more middling IPO stocks so far this year. The IPO priced at $17, and closed its initial day of trading at $20.38. Since then, however, LK stock has gained just 1%.That said, for a Chinese consumer play, even flattish performance doesn't seem that bad. Trade war worries have led to selling pressure on a number of Chinese stocks, but LK stock has managed to hold up and keep an aggressive valuation of about 6x revenue.Even management from Starbucks (NASDAQ:SBUX), which is aggressively targeting the Chinese market, admitted at a recent conference that Luckin's growth was impressive. But Starbucks CFO Patrick Grismer also noted that Luckin's revenue growth has come from "extreme marketing and very aggressive discounts."Between valuation and what may be marketing-fueled hypergrowth, LK clearly is a high-risk play. For investors who see the selloff in Chinese stocks as overdone, however, Luckin Coffee stock could be worth that risk. Pinterest (PINS)Source: Nopparat Khokthong / Shutterstock.com Since its April IPO, Pinterest (NYSE:PINS) has performed reasonably well. The stock is up 60% from its IPO price of $19, albeit with some volatility along the way.But PINS stock has weakened of late, dropping 18% from August highs following a strong Q2 report. As with other IPO stocks, valuation concerns may be a factor. PINS still trades at about 15x 2019 revenue estimates.With year-over-year revenue growth likely near 50%, however, that valuation doesn't seem all that extreme, at least in this market. Pinterest clearly has a solid niche, though InvestorPlace's Josh Enomoto worried that its demographics might be too narrow. That proved to be a significant issue for Snap (NYSE:SNAP), which still trades below its 2017 IPO price amid concerns that its potential beyond younger customers is limited. * The 8 Worst Stocks to Buy Before the Trade Turmoil Cools Off With PINS heading toward levels seen before Q2 earnings, there may be a near-term trading opportunity. Longer term, the performance of PINS likely boils down to whether the company can convince investors its torrid revenue growth can continue for years to come. Slack (WORK)Source: Shutterstock Slack (NYSE:WORK), too, was a victim of a tough week for IPO stocks. WORK stock dropped as much as 16% following second-quarter results due to weak guidance. Shares recovered most of those losses -- but then fell almost 7% on Friday.To be fair, WORK isn't necessarily an IPO stock. Like Spotify (NYSE:SPOT), the company went public via a direct listing, not an actual IPO. Ignoring that distinction, however, WORK clearly has been one of 2019's worst new issues.After Friday's losses, WORK is almost back to its initial price of $26. Guidance is concerning. Competition, most notably from Microsoft (NASDAQ:MSFT), remains intense. And it's not as if the decline makes WORK cheap. The stock still trades at 25x FY2020 revenue estimates and profitability remains a long ways off.Right now, WORK looks like a falling knife. And with at least two-plus months until the next earnings report, patience is required. Beyond Meat (BYND)Source: Sundry Photography / Shutterstock.com Beyond Meat (NASDAQ:BYND) has been the best of 2019's IPO stocks. Even with a pullback from late July highs, the stock is up over 500% from its IPO price of $25.Those gains have drawn quite a bit of scrutiny. More than a few investors have called BYND a bubble. While the opportunity for plant-based "meat" seems large, Beyond Meat doesn't have that opportunity to itself. Impossible Foods, Nestle (OTCMKTS:NSRGY) and Tyson Foods (NYSE:TSN) are among those targeting the market.All that said, there is real value here -- and a real company. Growth has been explosive. Distribution continues to expand. And Beyond Meat is not a play for vegans or for health-conscious customers, but rather traditional meat eaters looking to minimize their environmental footprint or simply replace meat once or twice a week.Beyond Meat is likely to grow for years to come -- the question, at above $150, is whether it can grow fast enough to support an enormously hefty valuation.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post 10 Big IPO Stocks From 2019 to Watch appeared first on InvestorPlace.
The debate is unfolding at a tricky moment for investors in the gig economy—both Uber and Lyft had disappointing public market debuts earlier this year, and now trade well below their IPO prices.
California’s decision to pass legislation that reclassifies gig workers as employees sounds expensive for ride-hailing companies Uber and Lyft. If hundreds of thousands of drivers receive protection such as minimum wages and paid time off, operating losses will soar. Leaving California is not an option.
Hailing a ride with Uber or Lyft in California could get more expensive if lawmakers enact a state bill putting tight controls on who counts as an employee, market experts say. A day after California state senators passed a bill clamping down on the use of “independent contractors” in the tech industry and beyond, analysts said the two ride-share giants would pass costs on to passengers if the bill becomes a law. Passengers in the Golden State will pay an additional 70 cents to $1.80 per ride if Uber and Lyft have to reclassify their drivers from cheaper-to-pay “independent contractors” to employees with full benefits, according to a Wednesday note from the investment bank Evercore ISI.
Hong Kong’s stock exchange used the oldest trick in the book: flattery. Charles Li, chief executive of Hong Kong Exchanges & Clearing, which has just made a surprising and unsolicited $32bn bid for the London Stock Exchange, described the potential pairing as “a corporate Romeo and Juliet story”. Britain is in political turmoil as the date to leave the EU approaches with no withdrawal deal in sight and Hong Kong has seen four months of protests over the territory’s autonomy from Beijing.
Uber has pledged to challenge new California rules that threaten to reclassify its drivers as employees, insisting that their work is not a core part of its business as a technology platform. Employment ...
California lawmakers sent the governor a bill Wednesday that would give new wage and benefit protections to workers at so-called gig economy companies such as Uber and Lyft where people pick up jobs on their own schedule.
(Bloomberg) -- Facing the most serious threat yet to its business model, Uber Technologies Inc. is dusting off a legal argument it has employed with mixed results: that it’s a technology platform, not a transportation company.Now, as a new California law threatens to upend its source of cheap labor, Uber is pointing to the ways in which it has attempted to diversify — into food and freight delivery, for example — to put a polish on the argument that its drivers are still independent contractors peripheral to its higher mission.“Drivers’ work is outside the usual course of Uber’s business, which is serving as a technology platform for several different types of digital marketplaces,” Tony West, the company’s chief legal officer, said in an interview with reporters Wednesday.Uber has generated billions of dollars from the labor of its drivers without the expense of treating them as employees. California is poised to disrupt that business model, and the ride-hailing behemoth is gearing up for another legal fight.Under Assembly Bill 5, which has cleared both houses of the California Legislature, workers in the gig economy would be entitled to a minimum wage and workers compensation if their duties are in the usual course of a company’s business.The idea that drivers are not core to Uber’s business is one that elicits indignation from critics, but the company has long relied on a version of this argument in attempts to avoid treating drivers as employees. It lost one such ruling in 2016, when a U.K. judge batted down the claim with a very cheeky retort: “The lady doth protest too much.”Proponents say the California bill, which has the support of Governor Gavin Newsom, will bring a groundbreaking shift to finally give workers their due. Uber and its allies say that if the bill becomes law, it may not meaningfully change the business model because there are still questions about which workers qualify.“AB 5 doesn’t all of a sudden -- magic wand -- change everybody’s status to employee,” said West. Instead, new criteria would be used to determine whether workers are employees or contractors, he said. “Now, whether or not we win under that test in California remains to be seen.”Skeptics say Uber may be too optimistic. While it’s used arbitration, litigation and settlements to thwart drivers’ attempts so far to be classified as employees, AB 5 could pose a significant risk to the company, especially if similar measures are adopted in other parts of the U.S., legal experts, academics and financial analysts say.Uber is “whistling past the graveyard” if it underestimates how much AB 5 would favor drivers, said Jason Lohr, an employment lawyer in Uber’s hometown of San Francisco. Most of the state’s legal community expects the drivers would be considered employees, requiring Uber to provide worker-compensation insurance like any other employer, he said.“If Uber balks, it will be a bonanza for personal-injury attorneys because the company will be presumed negligent when a driver is injured -- and on the hook for attorney’s fees for failing to provide coverage,” Lohr said.Rising CostsIncreased labor costs will likely mean higher fares for riders, which could undermine the growth strategies for Uber and its chief rival, Lyft Inc., said Tom White, an analyst at D.A. Davidson in New York.“Some of the data we’ve seen suggests that in order for ride-sharing to be a suitable replacement for car ownership, prices have to come down, not go up,” White said. “That part of the story gets eroded somewhat if Uber is forced to increase prices in a material way.”Uber shares are down about 25% from an initial public offering in May, which valued the company at about $78 billion. The stock already reflects concern over the California law, which may face obstacles, including a ballot measure funded by Uber and other companies, White said.“The market generally anticipates there being a headline about AB 5 being signed,” White said. “But I think there’s still some question as to whether that necessarily means that it’s enforced before the two sides hash something out.”The governor’s office has helped facilitate discussions between unions and the companies about offering drivers certain benefits but not employee status. The talks, which have been ongoing since last year, haven’t resulted in a compromise. Without a breakthrough, Newsom’s support of the bill indicates it’ll be signed into law.As AB 5 gained support in Sacramento, Uber complained that other industries had successfully lobbied to have their workers exempted from the law, from hair stylists and travel agents to dog groomers and engineers.Gig-economy companies also protested a provision giving California’s attorney general or city attorneys the ability to prosecute companies and block their operations if they mis-classify employees as independent contractors.‘Weaponizes’ LawThe provision “effectively weaponizes” AB 5 and could result in technology companies being “arbitrarily targeted with lawsuits and injunctions,” Uber, Lyft and six other companies said in a letter to Newsom and lawmakers.If AB 5 is signed into law, as Uber expects, the company is prepared to return to a familiar venue -- the courtroom -- to make its point that its drivers are “independent individuals,” West said. Part of that legal argument, he said, is that Uber considers itself a technology platform, not a transportation company.Under the new law, for its drivers to be considered independent contractors, they must perform work “outside the usual course” of the company’s business. Uber’s biggest business is ride hailing, but it also has created platforms for restaurant-meal delivery and freight trucking, and the company is working on new services.Uber is “connecting individuals with a work opportunity,” West said. “When courts understand that, they realize that drivers are not involved in the usual core business of Uber -- because Uber is a technology company that operates a marketplace.”(Updates with Uber executive quote in the third paragraph.)To contact the reporter on this story: Joel Rosenblatt in San Francisco at email@example.comTo contact the editors responsible for this story: David Glovin at firstname.lastname@example.org, Steve Stroth, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Legislators approved a bill that would reclassify Uber and Lyft drivers as employees, but the debate over gig worker rights is only beginning.
In the battle for control of the gig economy, score one for the drivers. This week, the California state senate voted 29-11 to approve AB5, a measure that requires gig economy companies like (UBER) (ticker: UBER), (LYFT) (LYFT), DoorDash and Postmates to treat their workers as employees, rather than contractors. The measure now goes back to the state assembly for a vote on the revised bill later this week, and then heads to California Governor Gavin Newsom, who supports the bill.
Equities continue to stretch higher as the week wears on, with U.S. stocks once again pushing higher. Let's look at a few top stock trades from Wednesday. Top Stock Trades for Tomorrow 1: AT&TEarlier this week, shares of AT&T (NYSE:T) were poised for big gains thanks to news of activist investor Elliott Management acquiring an equity stake. However, the stock faded for most of Monday's session, although it still ended higher on the day. InvestorPlace - Stock Market News, Stock Advice & Trading TipsOn Wednesday, shares took out Monday's high and are moving nicely to the upside. * 10 Healthcare Stocks to Buy Despite the Headlines The rally on Monday broke T stock over channel resistance (blue line). So long as it maintains above $37 -- which was weekly resistance and can be seen here -- then it's okay on the long side. Side note: Look at that awesome volume accumulation (blue circle)! Top Stock Trades for Tomorrow 2: UberUber (NYSE:UBER) and Lyft (NASDAQ:LYFT) stock actually traded higher, despite recent California legislation that's expected to hurt the ride-hailing companies' bottom line. Rallying on bad news is actually a good thing. For Uber, the stock has also broken over channel resistance. However, shares are being rejected by the 20-day moving average, and still face likely resistance at $36. Here's what to watch for now. Shares need to hold above former channel resistance and not make new lows. That will at least be constructive price action for the bulls. Additionally, let's see if Uber stock can reclaim the 20-day moving average. It tried on Wednesday but was rejected. If it does, $36 is on the table. Top Stock Trades for Tomorrow 3: LyftLyft has a very similar setup to Uber -- what a shocker. For Lyft though, it's not quite as far out of the woods is Uber. Shares were also rejected by the 20-day moving average and while they're currently above channel resistance, it's not a lay-up that it stays that way. Like Uber, Lyft stock needs to avoid making new lows. A close over $48 and the 20-day moving average could trigger a rally up to the 50-day moving average. Top Stock Trades for Tomorrow 4: Russell 2000 ETF The iShares Russell 2000 ETF (NYSEARCA:IWM) has been a beast this week, something InvestorPlace readers were tipped off to earlier this week in the Stock Market Today column. In any regard, the IWM is running into some potential resistance between $156.50 and $158. Over the latter and the bulls can look to squeeze the ETF up to the May highs near $160.50. The IWM has lagged the S&P 500, Dow Jones Industrial Average and the Nasdaq both year-to-date and over the past 12 months. If it can continue gaining momentum, perhaps it will look to close some of that gap. On the downside, bulls need to see $150 hold as support. Top Stock Trades for Tomorrow 5: Restoration HardwareThe company delivered another beat-and-raise quarter and yet, Restoration Hardware (NYSE:RH) actually opened lower on the day. Rising more than 6.5% by the close though, buyers really stepped up. As shares technically become overbought, there is additional concern as it runs into possible channel resistance. It's possible that it breaks out over this area, but if not, the bull case is not over. * 10 Stocks to Sell in Market-Cursed September So long as RH holds over $158, it looks good on the long side. That marks the prior high from March. I would love to see trendline No. 2 buoy the name from here. Should it fail as support, $150 could be on the table. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long T. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post 5 Top Stock Trades for Thursday: T, UBER, LYFT, IWM, RH appeared first on InvestorPlace.
It's very simple," said Congresswoman Lorena Gonzalez (D), author of the bill. Under this new law, if it passes, the worker will have the right to minimum wage, workers' compensation, unemployment insurance, paid family leave, and sick days.
California passed a bill that will require companies like Uber and Lyft to treat contract workers, like their drivers, as employees. Yahoo Finance’s Zack Guzman, Jessica Smith and Sibile Marcellus discuss with BigEyedWish Founder Ian Wishingrad.