For ridehailing company Uber Technologies (UBER), staying ahead of the game involves some creative thinking. And some recent moves suggest that creative thinking is not in short supply at Uber. That was good enough news for investors, who sent shares up over 2% in Tuesday afternoon’s trading.
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Uber took a look at its autorickshaw market in India, and realized it could make some changes therein that might get more drivers interested in working with the platform. Now, Uber will use a “zero-commission model” therein, charging its drivers a “subscription fee” instead.
Reports note that the market for ridehailing services in India is getting more competitive, as local vendors step in in a bid to eat Uber’s lunch. But this move should allow Uber to stay ahead of the pack. Uber will connect drivers with riders, but will not establish pricing. Instead, Uber will suggest a price for the intended ride, and will leave the final decision of what to charge to the driver and the rider.
The Drivers are Getting Creative Too
Meanwhile, Uber drivers in other nations—particularly in North America—are actually sleeping with the enemy, so to speak. Uber drivers are getting together with Lyft (LYFT) drivers to create “cooperatives,” and setting up their own apps to connect drivers and riders. The new move comes with its own, internally-elected leadership as well as policies designed to be transparent in things like deactivating drivers.
Ridehailing drivers are increasingly finding their earnings under fire as it becomes harder to actually get riders to get in their cars and pay for rides, reports note. But with the ridehailing cooperatives—which are generally set up as not-for-profit businesses—the end result is more cash going to the drivers and less going to the ecosystem that sustains them.
What is the Prediction for Uber Stock?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UBER stock based on 34 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 5.9% rally in its share price over the past year, the average UBER price target of $91.82 per share implies 13.46% upside potential.
