Uber, Lyft stocks surge as Trump scraps Biden-era contractor rule

Investing.com -- Uber Technologies (NYSE: UBER) rose 4% on Thursday, while DoorDash (NASDAQ: DASH) gained 4%, Lyft (NASDAQ: LYFT) climbed 4%, and Maplebear (NASDAQ: CART) advanced 3.3% after the Trump administration moved to repeal a Biden-era rule on independent contractor classification.

The U.S. Department of Labor released a proposal to scrap the 2024 rule, which made it harder for companies to classify workers as independent contractors rather than employees. The rule required companies to treat workers as employees under federal wage law when they are "economically dependent" on the company for work.

The proposal would replace the existing standard with one that focuses on how much control companies have over workers, a framework favored by business groups. The Labor Department said the 2024 rule was legally flawed and deprived workers of flexibility that comes with independent contracting.

The repeal will benefit companies in trucking, healthcare, retail sales and app-based transportation and delivery services, which rely heavily on contractors. Employees can cost businesses up to 30% more than contractors, according to several surveys, because they are entitled to minimum wage, overtime pay, unemployment insurance and other protections.

The 2024 rule had replaced a regulation adopted during Trump’s first term that allowed workers who own their own businesses or work for competing companies to be treated as contractors. The new proposal would largely revive that standard.

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