Shares of Uber Technologies (NYSE: UBER) were down 9%, as of 11:06 a.m. ET on Tuesday. Ridesharing companies could be facing a potential headwind from the U.S. Department of Labor's proposal to treat certain contract workers as company employees. This would entitle independent contractors to benefits and legal protections. 

Uber's stock is down 47% over the last year. One thing to blame is mounting losses of $10 billion, so this news just adds fuels to the flames of Uber's profitability issues. However, the market might be overlooking Uber's efforts in the U.K., which could make the ridesharing provider more competitive.

The dilemma over how to treat independent workers has gotten more attention since the pandemic began. It's estimated that nearly 60 million people did at least some work as freelancers in 2021. Uber and rival Lyft could face higher costs if the proposal becomes law. It's the uncertainty of what happens to Uber's cost structure and profitability under the new proposal that investors are concerned about.

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Source Fool.com