Shares of Uber (NYSE: UBER) are trading higher this month as investors seek exposure to reopening and recovery stocks.
Fundamental analysis: New drivers plan presented
Uber announced a new $250 million driver stimulus plan two days ago to support the current drivers and increase appeal for other drivers to join the ride-sharing company.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
“In 2020, many drivers stopped driving because they couldn’t count on getting enough trips to make it worth their time. In 2021, there are more riders requesting trips than there are drivers available to give them—making it a great time to be a driver. We hope drivers new and old will take advantage of this opportunity over the next few months and join us as cities get moving again,” the company said.
The California-based company is seeking ways to increase the number of drivers as it prepares to deal with an unprecedented amount of demand for mobility. The faster-than-expected vaccine rollout is helping Uber’s mobility business with the demand already higher than anticipated.
“We believe Uber is targeting to return to relatively normal levels of driver supply by 3Q:21, more funding was needed. Big picture, we see this as a strategically smart investment to increase supply, decrease wait times and improve the rider experience as the world reopens…which is likely to be important to drivingrider retention through/post recovery,” Morgan Stanley analyst Brian Nowak wrote in a note sent to clients.
The analyst also adds that Lyft (LYFT) is likely to follow the suit, otherwise it risks losing drivers to Uber.
eToro:
visit & create account
Technical analysis: Consolidation before a breakout?
Uber share price is trading almost unchanged on the week after it surged over 5% last week. This way, shares of Uber are on the path to post the best month since November.
Uber stock price is trading in a symmetrical triangle – defined by $53.00 and $58.50. Given the positive fundamental backdrop, shares of Uber are much more likely to break out higher as traders buying Uber stock are seeking fresh record highs above the $64 handle.
Summary
Uber presented a $250 million driver stimulus plan to attract new drivers as it copes with high demand for mobility. Shares are consolidating with a breakout above $59.00 offering a path towards fresh all-time highs.
