Shares of Uber Technologies (NYSE:UBER) and DoorDash (NASDAQ:DASH) gained 2.2% and 4.5% in yesterday’s trading session, respectively. The upside comes after the companies said that the new rules passed by the Biden administration on the reclassification of workers as employees would not impact their operations.
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The U.S. Department of Labor’s rule published yesterday states that any worker economically dependent on an employer should be considered an employee, making them eligible for benefits and other legal protections. These rules are expected to become effective in March 2024.
The reclassification of workers as employees is expected to significantly increase labor costs for several companies. This is because they would now be required to offer healthcare, paid time off, and overtime benefits to a greater number of workers. Nonetheless, investors’ worries about DoorDash and Uber’s potential decline in profits were allayed when they announced that the regulations would not affect them.
Which Stock is Good to Buy Now?
Following the news, a Top-rated analyst from Deutsche Bank, Brian Pitz, assigned a Buy rating to both UBER and DASH.
Upon comparing both UBER and DASH stocks, analysts are more bullish on UBER stock. It has a Strong Buy consensus rating based on 36 Buys and one Hold. Also, the average UBER stock price target of $65.83 implies 9.2% upside potential. Shares of Uber have gained 115.1% over the past year.
