What Happened?
Shares of ride sharing and on-demand delivery platform Uber (NYSE: UBER) fell 3.2% in the afternoon session after the company, along with rival Lyft, signed off on a deal to allow its California ride-hail drivers to unionize.
The agreement, announced by Governor Gavin Newsom, legislative leaders, and unions, permits drivers to collectively bargain for better pay and working conditions. For investors, the prospect of unionization raises concerns about potentially higher labor costs, which could impact the company's profitability and its business model, which has historically relied on the flexibility of contract work.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Uber? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Uber’s shares are quite volatile and have had 16 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 7 months ago when the stock gained 9.5% on the news that famous investor Bill Ackman revealed a 30.3m stake (shares) in the company, valued at roughly $2.3 billion.
Ackman, who is the CEO of Pershing Square Capital Management, added that Uber is trading at a "massive discount" and can be considered "one of the best managed and highest quality businesses in the world." Ackman said he's not new to Uber, and has been an investor since its early days. He highlighted Uber's early struggles with erratic leadership and praised CEO Dara Khosrowshahi's transformation of the company since 2017. Under Khosrowshahi, he acknowledged that Uber has evolved "into a highly profitable and cash-generative growth machine. "
Given Ackman reputation for identifying quality research in the stock market, the market is likely to read the information positively for the company's prospects in the near term.
Uber is up 47.5% since the beginning of the year, and at $93.20 per share, it is trading close to its 52-week high of $97.48 from July 2025. Investors who bought $1,000 worth of Uber’s shares 5 years ago would now be looking at an investment worth $2,772.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
