Uber suffers blow as UK court rules drivers have rights to workers’ rights – Report
Uber suffered a heavy blow on Friday after the UK Supreme Court ruled that a group of ridesharing company drivers were entitled to workers’ rights, including minimum wage, Reuters reported.
According to the Reuters report, a total of 25 Uber (UBER) the drivers were part of the case and Uber said the verdict did not apply to all of its current 60,000 drivers in Britain, including 45,000 in London. Currently, these drivers are considered self-employed. As a result, they are only entitled to minimal protections by law in the UK – a status Uber has sought to maintain in the legal standoff.
Reuters quoted UK Supreme Court Justice George Leggatt: “The Supreme Court unanimously rejects Uber’s appeal. The legislation aims to give certain protections to vulnerable people who have little or no say in their pay and working conditions. “
Uber’s director for Northern and Eastern Europe, Jamie Heywood, was quoted by Reuters: “We respect the court ruling which focused on a small number of drivers who used the Uber app in 2016. We are committed to doing more and will now consult with all active drivers across the UK to understand the changes they want to see. (See Uber stock analysis on TipRanks)
Uber shares fell 1% and closed at $ 58.39 on February 19.
Wedbush analyst Daniel ives reiterated a buy note and a target price of $ 76 (30% upside potential) on the stock. Following the UK Supreme Court ruling, Ives commented in a note to investors: “With London being one of Uber’s 5 best markets in the world, this ruling could clearly change that market to depending on the ripple impact for the company as a pathway for employees and vacations) rekindles a nightmare for Uber and the entire Gig Economy… ”
“For Uber heading towards a ride-sharing rebound, the company needs to carefully balance how it handles this latest legal challenge of the worker versus contractor debate that remains a lingering overhang on a global scale… We believe this move UK is a contained risk at this point for Uber and the Gig Economy as a whole, with the City of London and Uber having had many battles in recent years (licensing, etc.) with this latest issue, ”added Ives.
Overall, analysts are bullish on the stock with a strong buy consensus rating. This is based on 26 analysts recommending a buy and 3 analysts suggesting a hold. The average analyst target price of $ 71.46 implies an upside potential of 22.4% over current levels.