Companies like Uber and Lyft choose to misclassify their workers and rob them of benefits, said Aquent CEO John Chuang.

Lyft, Inc. (“Lyft”) (LYFT) today announced the pricing of $650 million aggregate principal amount of Convertible Senior Notes due 2025 (the “notes”) in a private offering (the “offering”) to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). Lyft also granted the initial purchasers of the notes a 13-day option to purchase up to an additional $97.5 million aggregate principal amount of the notes. The sale of the notes to the initial purchasers is expected to settle on May 15, 2020, subject to customary closing conditions, and is expected to result in approximately $637.5 million in net proceeds to Lyft after deducting the initial purchasers’ discount and estimated offering expenses payable by Lyft (assuming no exercise of the initial purchasers’ option to purchase additional notes).

Companies like Lyft and Zillow Group are using convertibles to shore up their balance sheets or simply take advantage of strong investor demand for the hybrid securities.

Repeated failure to comply with the requirement can lead to account deactivation for both riders and drivers, the executives said. Before starting their work each day, the app will require drivers to take a selfie with a mask, verify that they do not exhibit any coronavirus symptoms, confirm that they have sanitized their vehicles and agree to roll down windows during rides. Uber's Senior Director of Product Management Sachin Kansal said the company was also looking at adding selfie verifications for riders.

Uber is cutting costs at a rapid pace, allowing the ride-share company to focus greater attention on core businesses.

The core question facing the food delivery business is simple: Can it ever be profitable? The search for a path to profitability is the obvious driver of the current discussions about a potential acquisition of (GRUB) (GRUB) by (UBER)’ (UBER) food-delivery arm, Uber Eats. Food delivery faces the same competitive dynamic as ride sharing.

With ride-hailing down sharply in the pandemic, promotions have virtually disappeared.

What if Amazon.com decided to enter the ride-sharing market? Morgan Stanley analyst Brian Nowak floated that idea in response to a report that Amazon is in “advanced talks:” to acquire Zoox, a company working on autonomous vehicles.

On Monday, Uber Technologies announced that it would be cutting an additional 3,000 jobs. The company also revealed that it was considering reducing investments in several of its non-core projects, to help focus resources in its ride-hailing and food delivery sectors. The Final Round panel discuss the latest from Uber.

(Bloomberg) -- Uber Technologies Inc.’s offer to buy Grubhub Inc. antagonized officials in Washington and major U.S. cities, who were already taking steps to limit the fees companies charge restaurants and regulate their treatment of workers. If a deal between the two companies proceeds, analysts said it’s likely to face antitrust scrutiny.David Cicilline, a U.S. representative from Rhode Island who heads the House antitrust subcommittee, said the proposed deal underscores the urgency for a moratorium on most mergers, an idea supported by other Democrats. “Uber is a notoriously predatory company that has long denied its drivers a living wage. Its attempt to acquire Grubhub—which has a history of exploiting local restaurants through deceptive tactics and extortionate fees—marks a new low in pandemic profiteering,” Cicilline said in a statement.In San Francisco and Seattle, officials recently set limits on delivery fees, and Boston, Chicago and Los Angeles are among cities that have mulled similar measures. New York is set to vote Wednesday on restrictions that would bar companies from charging restaurants delivery fees of more than 15% and impose other limits. Such regulations are meant to protect restaurants and customers who are driving a surge in delivery orders while at home during the coronavirus pandemic.“Many small businesses and customers rely on these services, and we’ve seen that the fees, either on restaurants or on customers, can spike to unacceptable levels and without competition there’s less to limit their ability to price gouge,” said Matt Haney, who sits on the San Francisco Board of Supervisors and has criticized Uber for its delivery fees.Uber said it’s focused on driver safety and helping support independent, local restaurants struggling from effects of the virus. “Regulating the commissions that fund our marketplace—particularly during these unprecedented times—would force us to radically alter the way we do business, set a far-reaching precedent in a highly competitive market, and could ultimately hurt those that we’re trying to help the most: customers, small businesses and delivery people,” the company said in a statement.Food delivery tie-ups are complicated. Even before the Covid-19 crisis, many of the operations were unprofitable as they fought for market share. In New York alone, at least a dozen food delivery services compete for customers who are increasingly ordering from multiple platforms. Grubhub, the oldest of the major apps, had been forced to burn cash to play defense against upstarts like DoorDash Inc., the U.S. market leader, and Uber. Investors saw the prospect for consolidation as a way to help limit losses, but inflated private valuations and the risk of antitrust review presented hurdles to dealmaking.Then Covid-19 hit. Uber has had to reassure investors that it has enough cash to survive the year and pushed its goal of making an adjusted profit out to 2021. It also told 3,700 employees that they were losing their jobs, information many of them reportedly received over a Zoom call. Grubhub withdrew its financial guidance last month.Profits are elusive in the food delivery business. Uber’s adjusted revenue for food delivery more than doubled in the first three months of the year, according to the company’s latest financial report. But even with that massive increase in sales, the loss from food delivery actually increased by 1% in the period to $313 million. And that’s before the full brunt of the pandemic took hold in the U.S.Meanwhile, these companies face calls from officials to improve conditions for their gig economy workers. California’s attorney general sued Uber and rival Lyft Inc. last week, alleging they’re in violation of a state law designed to give their workers the benefits of employees. A loss in that case could set an important precedent that increases costs for these companies and raises further questions about their ability to be profitable.Persistent losses in the industry are why mergers seemed likely to many analysts and investors. In March, DoorDash accounted for 42% of the U.S. meal delivery market, according to research firm Second Measure. Grubhub had 28% and Uber 20%. “We’ve long believed that consolidation in online food delivery is inevitable,” Tom White, an analyst at D.A. Davidson, wrote in a note to clients Tuesday.But the current economic conditions increase the likelihood of drawing the attention of antitrust regulators, White wrote, especially “given the impact any deal could have on a restaurant industry that is struggling to survive in the face of the pandemic.”Restaurant advocates also said they were worried about the potential consequences of a deal. “It’s extremely concerning,” said Andrew Rigie, executive director of the NYC Hospitality Alliance, a group that represents restaurants in New York. Grubhub and its Seamless division already dominate the city, Rigie said, “and they use their leverage and market share at the expense of local restaurants.”Bradley Tusk, an early Uber adviser who has since sold his stake in the company, said if the policies cities are considering take hold long term, “it may be that consolidation is the only way to have a couple of market players that can survive at all.” Otherwise, food delivery could end up looking like the costly ride-hailing rivalry between Uber and Lyft, Tusk said. (Tusk also ran the 2009 mayoral campaign of Michael Bloomberg, the owner of Bloomberg’s parent company, Bloomberg LP.) “Uber should have found a way to buy or kill Lyft a lot earlier,” Tusk said. “The unit economics of ride sharing would be a lot easier if they had and I think they’re trying to learn that lesson now with the acquisition of Grubhub.”(Updates with background on worker rights issues in the ninth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Uber (NYSE:UBER) stock rose approximately 11% ahead of its earnings report on May 7. The rally had less to do with the ridesharing company and more to do with competitor LYFT (NASDAQ:LYFT) The company reported first-quarter revenue growth and unveiled its plans to survive the pandemic.Source: vaalaa / Shutterstock.com In reporting its own set of earnings, Uber revealed it lost $2.9 billion in the first quarter, translating to a GAAP loss of $1.70 per share for the period. Analysts were expecting a loss of $1.53 billion in the first quarter or 90 cents per share.On the bright side, CEO Dara Khosrowshahi noted the core ride-hailing business was showing signs of recovery with week-over-week gains in each of the last four weeks. Revenues climbed to $3.54 billion, a 14% increase over the year-ago period, but rides were down 3%.InvestorPlace - Stock Market News, Stock Advice & Trading TipsDespite the disappointing results, Khosrowshahi said he was confident that the company has ample liquidity to survive the effects of the novel coronavirus pandemic. Uber Eats is the company's strong suit in these times; it grew 54% YoY, thanks to the surge in demand for food deliveries. Also, the company is looking to curtail its fixed costs and investments to narrow out its losses as much as possible. * 7 Excellent Penny Stocks Ready to Roar I was quite satisfied that these are all positive developments. Uber has done what it can to make the best of a bad situation. It has been nimble-footed in carrying out some essential spring cleaning, and as the effects of the virus start to dissipate, the markets will reward these efforts. Uber Eats is Growing at a Fantastic PaceAt its 2009 start, Uber's primary purpose was to help people to get from point A to B, essentially creating a new platform for ridesharing. Since then; it has become a multi-billion dollar company, diversifying into several different service areas apart from its core business. One such segment is the food delivery service Uber Eats. It started as a pilot project in 2014 called UberFresh, delivering lunch and dinner from specific restaurants in California. Since then, it has expanded its restaurant selection and operates in several markets around the world. The Uber Eats division has had double-digit revenue growth for the past five years, with a 54% growth in Uber's latest quarter results.However, the segment has had trouble gaining traction in certain regions, particularly India and China. Rather than waste time, energy and money, the company has discontinued its operations in China and sold the Indian Uber Eats operations to Zomato earlier this year.Interestingly, though, Uber announced it is making a play to acquire Grubhub (NYSE:GRUB), which currently has a 30% market share in the food delivery business. With the acquisition, Uber Eats would have 50% of the market share in the food delivery business, 15% bigger than its main competitor, Doordash. Liquidity and Cost CuttingUber and other ride-hailing services have been hit hard by the health crisis, which is why they are looking to preserve the strength of their balance sheets. Currently, Uber's cash equivalents and short-term investments are $9.0 billion, which the company feels is enough to cover its cash burn until there is a significant rebound in demand for its ride-hailing service.Belt-tightening initiatives are already underway, as the company laid off 14% of its workforce in the past couple of months. Uber is also closing around 40% of its Greenlight locations. CEO Khosrowshahi has also agreed to waive his base salary for the rest of 2020. In addition to this, the company has exited eight global markets and has pulled back $150 million in advertising and incentives.It's worth noting that Uber recently landed a contract worth $810 million to provide ride-hailing services to the U.S. federal government, which will run through 2025. All of these initiatives should help shore up the company's balance sheet, leading me to believe the company has sufficient liquidity to weather the storm. About That ValuationMost analysts believe that Uber is currently underpriced and that investors could grab the stock at a bargain. According to Refinitiv, the price target for Uber stock lies somewhere between $55 and $15, with the average at $39.40. Surprisingly, Refinitiv has boosted its Earnings Rating for Uber over the past week from 5 to 7. The average Earnings Rating for its Online Services industry is 6.4, while the S&P 500 index average is 6.5. Additionally, Uber stock trading at a 37% bargain to its 52-week high price at $47.08. Therefore, there is a 21% upside to the stock to its current price of $32.54 per share.Uber's Q1 results are underwhelming. Analysts expect a more challenging second quarter due to negative headwinds and the structure of the company's offerings. However, the company's swift actions in preserving its liquidity and focusing additional resources on its Uber Eats division are likely to pay dividends in the future. Bottomline on Uber StockUber's core ride-hailing business is showing signs of recovery, and with the easing of restrictions across the world, things will only get better. The balance sheet looks strong enough to survive the crisis until the end of the year, but it needs to cut costs wherever it can to give it more breathing space. Furthermore, the acquisition of Grubhub will give it a decisive edge over its competitors in the food delivery business.Considering all this, it should come as no surprise that I am long on Uber stock.As of this writing, Muslim Farooque did not hold a position in any of the securities mentioned above. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Go Long on Uber Stock Despite Short-Term Headwinds appeared first on InvestorPlace.

The proposition would rollback the law known as AB5, which was targeted at forcing ride-sharing and food-delivery companies to classify their drivers as employees rather than contractors.

The Zacks Analyst Blog Highlights: Tesla, Uber, Lyft and General Motors

Boston Scientific and Fidelity National make the list Continue reading...

(Bloomberg) -- Ron Parise has spent about 50 hours a week for the last two years on the roads of Cape Coral, Florida, shuttling tourists and snowbirds between their rentals and the airport for Uber Technologies Inc. and Lyft Inc. All that came to a sudden stop in late March, when the arrivals gates went quiet and Parise’s wife insisted he stay home to avoid exposing himself to the coronavirus.Parise, 73, used his newfound free time to apply for any public assistance program for which he thought he might qualify. Nothing came through until early this month, when he received $11,500. It’s a small-business loan forgivable under certain conditions, part of the $659 billion Paycheck Protection Program, which is designed to encourage companies to keep paying employees during the pandemic. Parise believes he qualifies because he owns a one-man business to support his job driving.The state of Florida initially told Parise he wasn’t eligible for unemployment insurance, but he recently began receiving checks under the federal Pandemic Unemployment Assistance program, which gives relief to independent contractors who have been impacted by the pandemic.  This created an ethical dilemma for Parise, and perhaps a legal one, too. The small-business money is supposed to keep bosses like Parise from laying off workers— in this case, just Parise. Unemployment benefits are intended for people who have lost their jobs. “I don’t want to seem like I’m double dipping,” he said. “I’m happy to stay home and collect the government money if I can.” Parise said he hasn’t decided what to do but is leaning toward taking taking both and paying back the loan before it comes due in two years.While Uber considers its drivers to be independent contractors, some like Parise set up small businesses to manage their income from driving. The designation helps minimize personal and tax liabilities and for Parise, validates his status as an entrepreneur in his own right. “I’m more of an independent business person,” he said. “I hire Uber to send me customers.”Deciphering the rules around the government’s financial-assistance programs is a widespread challenge, and ride-hailing drivers face a particularly complicated route. The pandemic has left most of them unable to find enough work to get by. Meanwhile, Uber and Lyft haven’t altered their stance that drivers are independent contractors, not employees, disqualifying them from unemployment insurance in most states. The companies have directed drivers toward at least three alternatives, including the two Parise applied for.Congress created Pandemic Unemployment Assistance to help provide financial relief to workers normally ineligible for unemployment benefits, and Uber successfully lobbied for its drivers to be included. States manage the federally funded program, and implementation has been patchy at best. Many drivers have yet to receive money or even confirmation they’ll get it eventually, said Harry Campbell, who runs a popular website for drivers called the Rideshare Guy. “Some people are getting unemployment,” he said. “Some aren’t.”The financial-aid programs for small businesses have been similarly inconsistent. Tied up in the practical questions of where drivers can turn for help is an unresolved fight over whether Uber and Lyft’s workers should be considered employees of the companies. Many drivers, along with labor groups and Democratic public officials, have said the companies are cheating drivers out of benefits and offloading the costs onto taxpayers. “They are using the moment to crystallize the fact that, in their view, these workers should not have the benefit of employee status,” said Brian Chen, a staff attorney at the National Employment Law Project, a worker advocacy group. Ride-hailing companies oppose efforts by drivers to access traditional unemployment benefits from states, which are financed through payroll taxes. Uber and Lyft are contesting a California law intended to classify workers like their drivers as employees, and the state recently sued them in response. Most drivers, said Chen, would receive more generous benefits from state programs, an assertion Uber contests. “Congress fully funded pandemic unemployment assistance for gig workers so that every state, many of which face historic deficits, could give these workers immediate financial support at no cost to their own state funds,” said Harry Hartfield, a spokesman for Uber.Lyft and Uber would have been on the hook for $413 million in unemployment insurance costs over the last five years in California alone, according to a study published this month by the University of California, Berkeley’s Institute for Research and Labor. A similar analysis by officials in New Jersey said Uber would have faced a bill of $530 million for unemployment and disability from 2014 to 2018. Tally up the 48 other states, and you’re looking at a significant additional cost for two companies that have never been profitable.“I don’t want to seem like I’m double dipping”New York courts have ruled multiple times in favor of Uber drivers seeking unemployment benefits in the last year, but only after a lengthy process that’s onerous for both applicants and the state, said Nicole Salk, a senior staff attorney with Legal Services NYC who has represented several drivers in such cases. “It causes problems for the whole system.” she said.On Monday, four drivers for Uber and Lyft and a worker advocacy group sued Governor Andrew Cuomo and the New York Labor Department in federal court, claiming the state failed to pay unemployment benefits promptly. Jack Sterne, a spokesman for the governor, said New York is ahead of other states in its response to the jobs crisis and is processing more than 100,000 applications a week for the federal unemployment program. “During this pandemic emergency, we have been moving heaven and earth to get every single unemployed New Yorker their benefits as quickly as possible—including Uber and Lyft drivers who are treated no different than any other worker,” Sterne wrote in an emailed statement.Amara Sanogo, a driver in the Bronx, is living off his credit cards and helping his three children with their Zoom video curriculum as he waits for a response from the state about whether he qualifies for benefits. When he applied nearly two months ago, Sanogo set up an online account on a state website and was told he’d get updates there. “Every day I check that account,” he said. “There are no more messages.” New York’s Labor Department is now advising gig economy workers to apply to the federal program instead of the state’s.For drivers who set up a business to manage their Uber income, there are signs of significant interest in the small-business programs. Ron Walter, a driver in the Denver area who primarily works for Uber and Grubhub Inc., wrote a blog post about his experience applying for a PPP loan, which companies don’t need to pay back as long as they keep paying employees and adhere to other guidelines. Walter’s blog post contained a link encouraging other drivers to apply through a website called Womply.com, which charges lenders a commission for sending them leads. Dozens of drivers clicked through the link and filled out applications, according to data Walter received from Womply that was reviewed by Bloomberg.Walter got a loan of $4,800 and anticipates he’ll have to pay it back. He didn’t apply for other government programs, he said, because it didn’t feel right. Since Walter mostly delivers food, he said he’s actually doing pretty well. He can squeeze more deliveries into every hour and gets paid more. “Traffic is a lot better, and parking is a lot better because everybody is staying home,” he said. But as the economy worsens, Walter worries demand is not going to last. At some point, he said, “people run out of money.”(Updates with lawsuit in the 12th paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

As COVID-19 continues to transform our economic reality, two megatrends are converging to create a once in a lifetime investment opportunity

The end game, in the opinion of two analyst research notes, is more centralized operations and structure, with less pricey long-term investments.

"The next time you open the app things are going to look a little different for both riders and drivers,” Uber CEO Dara Khosrowshahi said on Wednesday.

Uber Technologies is a global company that is transforming the ride-sharing and meal delivery markets. After a much-hyped debut on May 10, 2019, Uber stock is one of the most watched IPO stocks today, but is Uber a buy right now in the current coronavirus stock market rally? Uber is in the midst of a dramatic turnaround, as the company fights to turn a profit.

Social distancing and tight consumer budgets amid COVID-19 may be a boon for the used car industry.