Ridesharing is making a comeback as people can actually go places again, but in New York City, some new regulations might be getting in the way. New rules designed to relieve traffic congestion in New York City might have former drivers turn more to ridesharing, but they are potentially playing hob with ridesharing operations themselves. However, in spite of this, both Uber (NYSE:UBER) and Lyft (NASDAQ:LYFT) are up in Friday afternoon’s trading, with Uber up almost 2% and Lyft exploding up nearly 9%.
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New York’s newest plan to relieve traffic congestion involves attempting to price as many drivers as possible out of driving downtown. The Traffic Mobility Review Board brought out a report to the Metropolitan Transportation Authority, where it revealed plans to set up toll service in what’s known as the Central Business District. That runs from Manhattan’s 60th Street and goes all the way to the end of the Financial District, further south.
The Mobility Review Board’s plan is to charge $7.50 for motorcycles, $15 for passenger vehicles, $24 for small trucks, and $36 for large trucks. It’s not all bad, though, as the plan will also include exemptions for government vehicles, discounts for working-hours traffic, and surcharges for taxi drivers and ridesharing plans.
The Horns of a Dilemma
While this sounds like an absolutely terrific way to ensure that people who would want to do business or buy things in New York City will stay well away so as not to be fined and penalized to death, the impact on Uber and Lyft could be mixed here. While former drivers will certainly be more willing to settle for the lower surcharges offered with rideshares, the impact on the drivers of said vehicles might be tougher to swallow. Meanwhile, Uber is already reeling from a recent blow in New York City, where it’s now required to pay workers at least $17.96 an hour. Uber’s attempt to block minimum wage rules at the state appeals court failed.
Is Lyft or Uber the Better Buy Right Now?
Turning to Wall Street, UBER stock is the clear winner right now. This Strong Buy-rated stock offers an 8.64% upside potential against its average price target of $62.44. Meanwhile, Hold-rated LYFT stock offers an $11.85 average price target, which, in turn, yields a 7.28% downside risk.
