Investors may want to pay close attention to Uber and Lyft.
Late last week, a California court struck down a measure that exempted these companies from a “state law requiring drivers to be classified as employees eligible for benefits and job protections,” as noted by USA Today.
In addition, according to The Wall Street Journal, “The companies don’t need to immediately change their way of doing business, but Friday’s ruling adds a wrinkle in their efforts to preserve their independent-worker models and serves as a setback in their years-long fight against the California law at the heart of the ruling.”
However, analysts say investors should buy the dip, with chances for a successful appeal.
Bank of America’s Justin Post for example, reiterated a buy, noting, “With Prop 22 winning in the 2020 election by a wide margin (5 9%/41%) and legal challenges to ballot initiatives in CA being fairly common, we expect many investors to see a solid basis for winning an appeal,” as quoted by Street Insider.
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