© Reuters.
Uber (NYSE:) forecasts a significant hike in its rideshare and delivery services prices following the Australian federal government’s decision to include gig workers in its workplace reforms. The company warned on Monday that the absence of clearer regulations could lead to a 55% rise in ride costs and a 65% increase in delivery fees, particularly during peak times. This could potentially result in a downturn in orders from eateries.
On the previous day, Uber had projected an even higher surge of 85% for its rideshare and Uber Eats services if Australia’s gig-economy laws pass. This legislation would enable the Fair Work Commission to set minimum standards for gig economy’s “employee-like workers”. While Uber supports “minimum pay”, their estimated increase takes into account casual award rates, penalty rates, reimbursement of expenses, and superannuation.
Dom Taylor, General Manager of Uber Australia, expressed concern over a potential loss of 40 million work hours and a $1.5 billion annual business loss due to decreased demand during “peak evening and weekend meal times”, as more Australians join the platform. As of now, Sydney drivers earn about $1,337 per week or $33.42 an hour.
Workplace Relations Minister Tony Burke acknowledged the potential consumer price hikes but considered it a “small price to pay” for “safety on the roads”. Despite the anticipated cost increases, Uber continues to endorse enhanced worker protections while emphasizing the importance of maintaining work flexibility.
According to InvestingPro data, Uber’s market cap stands at $88.85 billion, with revenue for Q2 2023 at $35.0 billion, indicating a growth of 37.0 %. Despite operating at a loss with an operating income of -$573 million, the company has seen a large price uptick over the last six months, with a 38.12% return. This aligns with InvestingPro Tips that highlight Uber’s high return over the last year and its position as a prominent player in the Ground Transportation industry.
However, it’s also worth noting that Uber’s revenue growth has been slowing down recently, and the company has been trading at a high Price / Book multiple of 10.9, as per InvestingPro data. This aligns with another InvestingPro Tip that suggests Uber is trading at a high EBITDA valuation multiple. These factors could potentially affect the company’s financial health, especially in light of the proposed regulatory changes in Australia.
For more insights like these, consider checking out InvestingPro, which offers a wealth of real-time metrics and tips on various companies, including Uber.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Read the full article here