Are Regulatory Issues Really "Priced In" to Uber and Lyft Shares?

This month, California enacted a law that closes a lot of the loopholes that had allowed businesses to classify many of their key workers as contractors rather than as employees. Among the companies that will feel that change most keenly are Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT). (It may just be one state, but with 40 million or so people and the world's fifth-largest economy, California looms large in their balance sheets.)

Given that, MarketFoolery host Chris Hill and senior analyst Jason Moser were a bit perplexed at the explanation given by a Wall Street analyst who on Monday upgraded both ridesharing companies' stocks: Regulatory risks, he said, are already priced into them, and he is upbeat about their abilities to improve and expand their offerings.

In this segment of the podcast, the pair discuss the value proposition of the ride-hailing services, the companies' pricing power, their ability to expand into adjacent services like food delivery, the gig economy, and more.

Source Fool.com