BofA on Prop 22 ruling: "Another favorable regulatory outcome"

BofA Securities analyst Justin Post weighed in on the decision by the 1st District Court of Appeals in California to overturn Judge Frank Roesch’s decision in Castellanos vs. the State of California (from 8/21/2021), which had deemed Prop 22 unconstitutional.

"We think the Street was bracing for a loss for the Gig-industry and, in our view, the decision is an important net-positive as it reinforces the value of a ballot initiative as a bargaining chip for the industry in other states. We would expect the appeal by the SEIU to the state Supreme Court to take another 6-12 months to process, and most press reports suggest that the CA Supreme Court would want to take up the case, so the legal battle does not seem to be over."

"While we think today’s decision is a net-positive for the entire industry, we continue to prefer Uber over Lyft given market share and recent profitability trends; Maintain Buy on Uber, Underperform on Lyft. The decision could potentially be most relatively positive for the delivery industry, as restaurant delivery would be less scalable in an employment scenario (possibly more impacted than ridesharing); Maintain Buy on Dash."

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 $30.82 yesterday.

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