On Thursday, Uber Technologies fell while it and other app-based food delivery firms like DoorDash sued New York City law.
Its stock price went down by -3.55% to $42.11 per share on July 06. The companies plan to strike down the city for its law that set a minimum wage for delivery workers.
Uber and other delivery firms filed separate complaints in the New York state court. They claimed the law is based on a lack of understanding of how the food delivery sector functions. Also, Grubhub joined in its lawsuit with DoorDash as the law would take effect on July 12.
The law would require the companies to pay their delivery workers $17.96 per hour and rise to $20.00 in April 2025. It is up to the entities to decide if they would pay their workers by the hour or for every delivery. Moreover, it would be based on how many hours the staff are on the applications.
As a result, the delivery apps like Uber must add the number of trips completed in an hour to adjust to the new labor costs. Therefore, it forces them to shorten service areas, negatively affecting consumers and restaurants.
In addition, Uber and DoorDash both increased their yearly earnings estimates in May after topping quarterly revenue forecasts. The recent financial data came from more food, groceries, and other product orders.
Saudi Arabian Uber Problem is from the Government
A customer in Saudi Arabia tried hailing an Uber to go to an important meeting. However, several drivers accepted but cancelled, making the customer claim it to be the worst experience.
According to a Western consultant, it is getting more challenging to go around Saudi Arabia and frustrating to plan. Its government’s expectation is far from reality when they draw in foreign companies.
In 2020, they established that only Saudis could work for the apps. As a result, it can shrink the pool of recruits available to Uber and Careem. Besides, 40.00% of its population are foreigners.
Moreover, the number of accepted and completed ride requests fell by 50.00% after nationality and car age restrictions.
