TLDR
- Uber stock dropped 5.6% to $83.18 after Morgan Stanley cut price target to $110 from $115
- Company discontinued monthly bonuses for electric vehicle drivers amid broader climate initiative pullback
- Barcelona saw 1,500 taxi drivers protest while similar regulatory challenges emerged in UK and Canada
- Citizens highlighted competitive threats from Waymo autonomous technology and potential Tesla convergence
- Year-to-date gains stand at 31.7% despite stock trading 16.9% below October 52-week high of $100.10
Uber experienced a sharp decline Wednesday with shares falling 5.6% to close at $83.18. Multiple factors combined to pressure the stock lower throughout the session.
Morgan Stanley trimmed its price target to $110 from a previous $115 target. Analysts kept their Overweight rating intact, indicating continued optimism about long-term prospects. The reduction still sparked selling among investors.
The company eliminated its monthly electric vehicle bonus program for drivers. This represents a pullback from previously announced climate commitments. The decision came as management faces mounting pressures across multiple fronts.
Reports suggest the timing aligns with increased regulatory scrutiny in European markets. Cost management appears to be taking priority over environmental initiatives in the current operating environment.
Protests Erupt Across European Markets
Barcelona’s city center ground to a halt as roughly 1,500 taxi drivers staged a blockade. Protesters back proposed legislation that would drastically reduce ride-hailing licenses. The law could effectively eliminate most ride-sharing operations in the region.
Similar resistance emerged in the Cotswolds where licensed drivers demanded complete removal of the Uber platform. Halifax officials in Canada are evaluating new rules to balance competition between ride-hailing and traditional taxis.
These coordinated efforts demonstrate sustained opposition from established taxi operators. Local governments continue wrestling with how to regulate emerging transportation platforms.
Autonomous Vehicle Competition Concerns
Citizens maintained its Market Perform rating while flagging execution strength across Mobility and Delivery segments. The firm outlined three specific competitive scenarios that could challenge Uber’s dominance.
First, Waymo developing general-purpose autonomous technology that doesn’t require detailed mapping. This breakthrough would enable partnerships with major automakers for rapid scaling.
Second, a hypothetical Waymo acquisition of Lyft creating a hybrid autonomous-human driver network. This merger would lower costs and strengthen Lyft’s competitive position materially.
Third, Tesla’s self-driving technology reaching parity with Waymo’s capabilities. This convergence would produce a competitor with manufacturing scale and lower unit costs than human-driven vehicles.
Strategic Initiatives Continue
Uber partnered with Avride to launch robotaxi service in Dallas. Riders can access autonomous vehicles within a 9-square-mile area at no extra cost. Expansion plans are under development for additional markets.
The company also teamed with Starship Technologies for autonomous sidewalk delivery robots. Service begins in Leeds, UK, next month with broader European and U.S. rollout planned.
Despite the day’s losses, Uber maintains strong year-to-date performance with 31.7% gains. The stock sits 16.9% below its $100.10 October peak.
S&P Global revised Uber’s outlook to positive from stable based on robust growth metrics. Third quarter data showed 22% trip growth year-over-year driven by higher monthly active users and increased trip frequency.
Citizens acknowledged that current Waymo vehicle supply constraints limit immediate competitive impact. Five analysts recently raised earnings estimates as revenue growth reached 18.25%.
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