Uber stock rises after NYC judge blocks driver pay raise
Uber (UBER) shares are up about 5.0% after a New York City judge recently blocked pay raises for rideshare drivers.
This marks a notable win for Uber, which sued NYC's Taxi & Limousine Commission (TLC) protesting a city-wide rate hike back in December. The company argued that the TLC's methodology in determining the rate hike was flawed, and Uber's pushback caused thousands of New York City drivers to protest.
In the lawsuit, Uber said that the rate hike for drivers would cost between $21 million and $23 million monthly. Though the company was able to record a 72% revenue leap in its last earnings report, the company's net loss for the quarter still clocked in at a jarring $1.2 billion.
Piper Sandler analyst Alex Potter upgraded Uber from Overweight to Neutral, with a price target of $33 up from $31, saying that high vehicle prices will push consumers away from replacing cars and towards ride-hailing options.
"Expensive cars may force consumers to consider alternative forms of mobility," Potter wrote in Jan. 8 note to investors. "In November, the average price of a new car was [about] $49,000 in the United States and while used car prices have 'rolled over,' the real price of buying a used car is still rising (at least if financed using a loan). Uber is our #1 way to invest in this theme."
Simultaneously, Potter downgraded DoorDash (DASH) to Underweight and lowered its price target from $227 to $40, noting the move "reflects a preference for UBER, not a belief that something is 'broken' at DASH."
"[About] 36% of revenue comes from doorstep deliveries, so Uber is admittedly exposed to some of the same demand risks as [DoorDash], but superior scale has allowed Uber to lever its overhead more effectively than peers," he wrote.
DoorDash shares are up about 3% since the market opened Monday.
2022 was a rough year for Big Tech and Uber was no exception, as the company saw its stock drop about 38% throughout the year. Competitor Lyft fared far worse, as its shares have dropped about 70% in the last twelve months. However, there's good news today for Lyft, too – the rideshare company's shares are also up Monday morning, climbing more than 7% since the market opened.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks.
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