Lyft, Uber stocks rise following California court’s decision over gig workers

Yahoo Finance Live anchors Julie Hyman and Jared Blikre discuss the rise in stock for rideshare giants Lyft and Uber.

Video transcript

JARED BLIKRE: And moving on here, shares of Uber and Lyft steering to the upside, and that's following a California court's ruling on allowing the rideshare companies to classify their gig workers as independent contractors instead of employees. Now, this removes some of the future regulatory risks.

And just looking at the stock reaction here-- I have it up on YFi Interactive as well. You can see Uber up 7%. DoorDash up also up 7%. Lyft up 8%, although a much smaller square there.

And let's just check and see how this compares to the year to date. Still in the green for some of these. Look at this, Uber up 33%. Lyft down 16%.

And I remember this dynamic playing out when we were covering their earnings. What was that, a few weeks to a month ago? Just very different execution styles for this environment, and that's what it takes.

JULIE HYMAN: Yeah, there's a note out from Jefferies reacting to this decision, calling it a big win for Uber and Lyft, DASH, DoorDash too, any of these, like, sort of gig-economy companies. Basically the estimates here is that Uber, DASH, and Lyft avoided $170 million for Uber, $100 million for DASH, and $20 million for Lyft in EBITDA headwinds. In other words, it would have cost these companies a lot more money had this gone through because of these workers being classified in a different way. And so that's something that is obviously positive for these companies.

That said, according to this note, it'll likely be appealed to the California Supreme Court. So still, this is not the end the end, the definitive end of the situation, but this is a positive step for many of these companies that have been fighting this tooth and nail for quite some time.

JARED BLIKRE: Yes, I remember talking about this story in, what, 2017, 2018?

JULIE HYMAN: Yeah, it's been lingering around for a while.

JARED BLIKRE: And as you said, it's going to be probably another year now before we get the definitive.