Weakness in Uber Technologies (UBER) may be an opportunity.
For one, after gapping from about $28 to $25, the stock appears to have stabilized, and is starting to pivot higher. Two, the U.S. Department of Labor issued a proposal on that could classify gig economy workers, as employees rather than contractors.
However, it’s just a proposal at this point.
According to Bernstein analysts, this is a case of déjà vu. “Here we go again,” they said, as noted by Investing.com. “While the headlines aren’t favorable, there is no immediate change to the operating models of these businesses.”
“The DOL’s proposal is the first step in a longer process before any final determination is made. There will now be a 45-day comment period for public feedback, which will push potential enactment of the rule to 1H23 at the earliest,” the analysts added. “The companies have noted that the proposal looks similar to the rule that existed under the Obama Administration, which did not result in any reclassification of gig workers at the federal level.”
In short, fear may have created opportunity.