Beautiful Virgin Islands

Friday, Feb 20, 2026

After Prop 22 vote, all eyes are on Uber earnings

After Prop 22 vote, all eyes are on Uber earnings

Uber investors breathed a sigh of relief this week as Californians voted to pass a ballot measure that defends the business model it pioneered by allowing it to continue treating its drivers as independent contractors in the state, rather than employees.

The company's stock rose nearly 15% Wednesday on news that the Proposition 22, or "Prop 22," had passed.

With Election Day behind it, the company must now confront investors about other significant issues, like when it will stop losing billions of dollars and the ongoing negative impacts of the coronavirus on its business.

Uber reports its third quarter earnings after market close Thursday. The company's revenue is expected to decline to $3.2 billion compared to $3.8 billion during the same period last year, and it is expected to post a loss per share of $0.65, or an estimated loss of $1.1 billion, compared to a $0.68 per share loss during the same period last year, according to analyst estimates compiled by Refinitiv.

Here's where Uber stands and what analysts are watching for.

One cloud over its business has cleared


Tom White, an analyst at DA Davidson, told CNN Business that the regulatory cloud when it comes to driver classification has been "backburnered" with the California vote.

Prop 22 was designed to side-step a new California law, Assembly Bill 5 or AB-5, which went into effect on January 1 and codifies an "ABC" test to determine if workers are employees who are entitled to labor protections and benefits.

Classifying their drivers as employees has long been viewed as a potential existential threat to Uber, which scaled its business with a massive fleet of workers it treated as independent contractors, shirking the responsibility of costly benefits entitled to employees, such as a minimum wage, overtime, paid sick leave and unemployment insurance.

Uber, Lyft, DoorDash, Instacart and Uber-owned Postmates sunk more than $200 million to fight Prop 22 because had it failed, the company would have had to fundamentally alter its business model.

BTIG analyst Jake Fuller wrote in an investor note Wednesday that if it had failed to pass, it would likely have meant Uber would cut drivers and increase fares to offset the cost of reclassifying drivers as employees. It "would have been a drag" on revenue and earnings, he wrote.

In an industry note ahead of Election Day, Wedbush analysts wrote Monday that not passing Prop 22 "will likely lead to a net-negative financial impact in California, and potentially other states." Wedbush analysts reacted to the vote, saying "this removes a significant overhang and dark cloud for the likes of Uber and Lyft."

Prior to the outcome of the Prop 22 vote, Wall Street "had concerns that other cities and states could follow California on the employee model shift if Prop 22 did not pass," they wrote.

But the passage of Prop 22 gave investors reason to be optimistic about how it could fare when faced with other driver classification challenges in the future.

Prop 22 will grant some benefit concessions, but not the full suite of protections employees would get, such as workers' compensation or unemployment insurance. These concessions are less expensive, which is better for Uber's bottom line in its quest to stop bleeding money. (Opponents say this comes at the expense of some drivers.)

The outcome of the California ballot measure was viewed as bellwether for how Uber and other gig economy companies may navigate regulatory battles in other parts of the country. Uber is currently facing a regulatory battle over worker classification in Massachusetts, for example.

DA Davidson's White said he expects the Prop 22 model which defines a "new class" of workers will be one "the rest of the nation ends up following."

When will Uber turn a profit?


Investors are eager to hear if the company has any updates on its timeline to achieving profitability on an adjusted basis, which it previously projected to investors that it will do by sometime next year.

Last quarter, Uber posted revenue of $2.2 billion, a 29% decline compared to the same period last year. It lost $1.8 billion during the quarter, and a staggering $2.9 billion during the first quarter of this year. In total, Uber lost $8.5 billion in 2019.

With its ride-hail business dwindling due to the virus, Uber's delivery business, Eats, has taken on new importance and became its biggest source of revenue last quarter as people increasingly rely on its service during the pandemic. In July, Uber announced it would acquire one of its competitors in the space,
Postmates, in a bid to bolster its food delivery business.

As CEO Dara Khosrowshahi said at the Wall Street Journal's Tech Live conference last month, Eats is not yet profitable, and the company believes it will reach profitability around the same time as its overall business.

White said he is watching to see if Uber reveals to what extent growth in its delivery business, Eats, is having on the company's overall race to profitability.

Investors are carefully monitoring the business given how competitive the delivery marketplace is - some competitors in the US include DoorDash, and Grubhub - and how businesses compete on driving down prices to win customers.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Early 2026 Data Suggests Tentative Recovery for UK Businesses and Households
UK Introduces Digital-First Passport Rules for Dual Citizens in Border Control Overhaul
Unable to Access Live Financial Data for January UK Surplus Report
UK ‘Working Closely with US’ to Assess Impact of Supreme Court Tariff Ruling
Trump Criticises UK Decision to Restrict Use of Bases in Potential Iran Strike Scenario
UK Foreign Secretary and U.S. State Chief Hold Strategic Talks as Tensions Rise Over Joint Air Base
King Charles III Opens London Fashion Week as Royal Family Faces Fresh Scrutiny
Trump’s Evolving Stance on UK Chagos Islands Deal Draws Renewed Scrutiny
House Democrat Says Former UK Ambassador Unable to Testify in Congressional Epstein Inquiry
No Record of Prince Andrew Arrest in UK as Claims Circulate Online
UK Has Not Granted US Approval to Launch Iran Strikes from RAF Bases, Government Confirms
UK Intensifies Efforts to Secure Saudi Investment in Next-Generation Fighter Jet Programme
Former Student Files Civil Claim Against UK Authorities After Rape Charges Against Peers Are Dropped
Archer Aviation Chooses Bristol for New UK Engineering Hub to Drive Electric Air Taxi Expansion
UK Sees Surge in Medical Device Testing as Government Pushes Global Competitiveness
UK Competition Watchdog Flags Concerns Over Proposed Getty Images–Shutterstock Merger
Trump Reasserts Opposition to UK Chagos Islands Proposal, Urges Stronger Strategic Alignment
Greek Prime Minister Kyriakos Mitsotakis advocates for a ban on minors using social media.
Liberal Senator Michaelia Cash Accuses Prime Minister of Lying to Australians
Meanwhile in Time Square, NYC One of the most famous landmarks
Jensen Huang just told the story of how Elon Musk became NVIDIA’s very first customer for their powerful AI supercomputer
A Lunar New Year event in Taiwan briefly came to a halt after a temple official standing beside President Lai Ching‑te suddenly vomited, splashing Lai’s clothing
Jillian Michaels reveals Bill Gates’ $55 million investment in mRNA vaccines turned into over $1 billion.
Ex-Prince Andrew Mountbatten-Windsor's arrested
Former British Prince Andrew Arrested on Suspicion of Misconduct in Public Office
Four Chagos Islanders Establish Permanent Settlement on Atoll
Unitree Robotics founder Wang Xingxing showcases future robot deployment during Spring Festival Gala.
UK Inflation Slows Sharply in January, Strengthening Case for Bank of England Rate Cut
Hide the truth, fake the facts, pretend the opposite, Britain is as usual
UK Inflation Falls to Ten-Month Low, Markets Anticipate Interest Rate Cut
UK House Prices Climb 2.4% in December as Market Shows Signs of Stabilisation
BAE Systems Predicts Sustained Expansion as Defence Orders Reach Record High
Pro-Palestine Activists Cleared of Burglary Charges Over Break-In at UK Israeli Arms Facility
Former Reform UK Councillors Form New Local Group Amid Party Fragmentation
Reform UK Pledges to Retain Britain’s Budget Watchdog as It Seeks Broader Economic Credibility
Miliband Defends UK-California Clean Energy Pact After Sharp Criticism by Trump
University of Kentucky to Host 2026 Summer Camps Fair Connecting Families with Local Programmes
UK Police Forces Assess Claims Jeffrey Epstein Used Stansted Airport Flights in Trafficking Network
UK-Focused Equity ETF FLGB Climbs to Fresh 52-Week Peak on Strong Market Sentiment
Trump Warns UK’s Chagos Islands Agreement Is a “Big Mistake” Amid Strategic Security Debate
Trump Urges UK to Retain Sovereignty Over Diego Garcia Amid Strategic Concerns
Italian Police Arrest Man After Alleged Attempt to Abduct Toddler at Bergamo Supermarket, Child Hospitalised With Fractured Femur
Reform UK Appoints Former Conservative Minister Robert Jenrick as Finance Chief
UK Unemployment Rises to Highest in Nearly Five Years as Labour Market Weakens
Rupert Lowe Advocates for English-Only Use in the UK
US Successfully Transports Small Nuclear Reactor from California to Utah
South Korea's traditional sand wrestling sport ssireum faces declining interest at home
Japan outlawed Islam
Virginia Giuffre accuses Epstein of trafficking to powerful men for blackmail.
New Mexico lawmakers initiate investigation into Zorro Ranch linked to Jeffrey Epstein
×