There was a time when ride-hailing stock Uber (UBER) offered up “unpaid sabbaticals.” Basically, a worker could get a slug of time off—though without pay—while going after a certain side project, and could return to work afterward without penalty. But now, Uber is changing up how it does that, making the block of time unavailable to many who could get it before. Investors were happy about this, though, as shares gained around 2.5% in Friday afternoon’s trading.
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Uber’s sabbaticals were even different in that they allowed for paid time off, which makes them one of a bare handful of companies to offer the benefit. But now, instead of extending the benefit to employees with five years’ time in with the company, it is now stretched out to eight. Some believe that this is the start of a broadening trend in which employers get tighter controls about allowing employees time away from the business.
In fact, Uber’s CEO, Dara Khosrowshahi, essentially shrugged when asked about the change, noting, “If you’re here for a sabbatical and this change causes you to change your mind, it is what it is.” In the same meeting, reports noted, Uber also ramped up its return-to-office mandates, requiring employees to be in the office three days a week instead of the two it was before.
Oh, That’s Why
A potential reason for this sudden sea change likely came with remarks from senior vice president Andrew Macdonald, who detailed how autonomous vehicle operations were on the rise. This might sound like the opening salvo in a round of massive layoffs, but no, not according to Macdonald. In fact, Macdonald looks for there to be more Uber drivers in 10 years, rather than less, but how their jobs work will be fundamentally different.
In fact, Uber drivers in Phoenix reported that they were passing up on short-distance trips, particularly in city-center operations, in favor of airport runs, which offered better profit for the driver. The short-distance stuff in city centers was increasingly handled by robotaxis. And with Uber increasing its own robotaxi operations, the human driver may be purely long-range before too much longer. Plus, there is the matter of inclement weather driving, which all but requires a human’s reaction time to navigate. At least, for now. Thus, Uber is increasingly pushing for a “hybrid” model that allows autonomous vehicles to handle some situations, and people for others.
Is Uber a Buy or Sell Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on UBER stock based on 28 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 37.29% rally in its share price over the past year, the average UBER price target of $97.04 per share implies 4.74% upside potential.
