Truist Discusses the Uber Inc. (UBER) Fallout from UK Ruling

Truist Securities analyst Youssef Squali reiterated a Buy rating and $66.00 price target on Uber Inc. (NYSE: UBER ) after the UK Supreme Court rejected Uber's final appeal that its drivers should not beconsidered "workers". The court ruled a group of 130 drivers who brought the case were not independent contractors because their activities were "very tightly defined and controlled by Uber". The ruling will classify Uber's drivers as "workers", which is a class of employed persons in the UK that is entitled to minimum wages, holidays, and certain benefits (as opposed to employees who are entitled to guaranteed employment rights and benefits).

The analyst stated "While it is difficult to determine the exact financial impacts of this decision considering a number of unknowns still, we note the following: The UK accounted for 7.8% of Mobility Gross Bookings in 3Q20. This ruling does not pertain to Uber's food delivery segment in the UK. This should have no impact on the company's goal of turning adj. EBITDA positive
later this year. The case is now back in the hands of the employment tribunal (where it originated), which could order Uber to pay compensation to the claimants. If this ruling were to be applied on a forward-looking basis (currently it is backwardlooking) across the entirety of its driver base in the UK, Uber would likely see its driver cost increase by an amount greater than what we're modeling for Prop 22, but less than the impact AB5 would have had, which the company had estimated at ~35%."

For an analyst ratings summary and ratings history on Uber Inc. click here. For more ratings news on Uber Inc. click here.

Shares of Uber Inc. closed at $57.46 yesterday.

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