Uber Technologies Inc. and Lyft Inc. shares rose sharply Monday as Wall Street analysts continued to suggest that gig companies — largely founded during and after the last large U.S. recession — could flourish in any coming economic pullback. Piper Sandler analysts wrote in a note Monday that vehicles are getting too expensive, with higher interest rates and limited availability as key factors, which could cause some consumers to turn to on-demand rides from Uber
and rival ride-hailing company Lyft
“Vehicle prices are near all-time highs, and a quick reversion to historical pricing seems unlikely,” the analysts wrote. “As a result, we think cash-strapped consumers will increasingly opt to hail rides instead of trying to replace old cars.” The analysts upgraded Uber on their belief that out of the biggest gig companies, it may be in the best position to withstand a possible recession. They said Lyft and Getaround Inc.
a peer-to-peer car-sharing platform, are also likely to benefit. But because of its scale, Uber is “our #1 way to invest in this theme,” they added. Shares of Uber and Lyft are building on their upward momentum so far this year after an ugly 2022, with Uber shares ending the day nearly 4% higher at $27.40 after rising four of the past five days. The stock is up 10.8% year to date. Lyft’s stock gained more than 6% to close at $12.70 Monday, has been up seven of the past eight days and has risen about 15% so far this year. The analysts’ notes Monday are in line with other recently published sentiment, as well as commentary from executives, that sees an upside for the gig economy during a possible recession. Last week, Bank of America analysts wrote that the souring economy could boost gig companies’ labor supply. See: Uber, DoorDash and Lyft could see hundreds of thousands of new gig workers because of recession, analysts say Jefferies Equity Research analyst John Colantuoni, who took over lead coverage of the sector, on Monday retained Uber stock at buy and Lyft at hold. He also initiated DoorDash Inc.