Sunday, February 25, 2024
Stocks To Sell

The Gig’s Up: 3 Stocks to Sell as the Gig Economy Slows Down

Find out which gig economy stocks are underperforming and why it might be time to sell your positions

The gig economy is still going strong in 2024. It’s also growing three times faster than the U.S. workforce as a whole, which is pretty cool. In the U.S., this means that by 2027, more than half of the people who work will have gig economy jobs. The fast rise makes it easier for job workers to find work and for businesses to find good people. One problem with this growth is that it comes with some risks. The growth of gig work in different fields creates new possibilities and major problems. As a result, while gig economy stocks are attracting attention, investors are also looking for stocks to sell in this area as well. 

People who work in the gig economy are happier with their jobs and like having more freedom. Still, they also face problems like not having job stability and not getting regular benefits. These problems can be seen in the gig economy stocks to sell. Even though gig workers love having the freedom to set their own hours and be flexible, they often don’t have access to basic benefits like health insurance. In addition, the impact of global economic trends hits the gig economy harder than the traditional job markets.

As the gig economy changes, so do its stocks. This means that buyers should be careful as they try to make money in this new but risky market.

Uber Technologies (UBER)

Uber Technologies (NYSE:UBER) is a contrast in the world of gig economy stocks because its stock price has gone up by 117% in the last year. It faces hurdles, even though it has made great progress. Uber’s most recent earnings report showed that it missed estimates by a small amount. That casts doubt on its planned financial path. 

Also, Uber’s $30 million political donation in California shows that it wants to change the rules for the gig economy. But this move, which was meant to improve driver classification and mental health, hasn’t yet shown any clear benefits for the company’s bottom line. While this is going on, insider trading actions like CEO Dara Khosrowshahi selling stock could make people worry about Uber’s future.

Uber has trouble with regulations in other countries, especially in Switzerland. The fact that the company gives drivers cab licenses shows that it is still fighting standard taxi services. This push from regulators makes things even more difficult for Uber to run. Also, the fact that electric cars now have to pay Road User Charges in New Zealand makes people wonder what will happen to Uber’s efforts to make transportation better.

When buyers think about selling gig economy stocks, these factors make things more complicated. Uber’s journey, hampered by government rules and unstable markets, needs close attention. That is true for both the average investor as well as people who have money in the gig economy.

DoorDash (DASH)

When looking at the volatile world of gig economy stocks, DoorDash (NASDAQ:DASH) tells an interesting story. Even though the company has lost an amazing 80% in the last year, it has shown that it can bounce back by strategically diversifying. DoorDash’s latest moves into grocery stores and retail stores are risky, but they show that the company wants to break down standard barriers.

With an impressive $878.0 million in free cash flow, DoorDash’s finances look good. But this number hides the real problems that come from fast growth and competition. DoorDash’s growth in foreign markets is still tentative. Its purchase of Wolt Enterprises was a careful move into new markets. It’s smart for the company to avoid engaging in growth that isn’t efficient. But this makes me wonder if it will be able to stay in business in the long term in the very competitive gig economy.

With a 59% share of restaurant orders in the U.S., DoorDash’s ability to run its business well is clear. However, the gig economy is known for being unstable, and there are a lot of legal hurdles to overcome. In addition, DoorDash is facing intense competition from rivals such as Grubhub and Lyft (NASDAQ:LYFT), among others. The situation leads to razor-sharp margins, eating into profits. 

While DoorDash’s plan to avoid wasteful growth investments is a good one, it might not be enough in the rapidly changing gig economy. This careful approach, along with significant losses last year, makes DoorDash one of the gig economy stocks that you might want to sell.

Airbnb (ABNB)

Airbnb (NASDAQ:ABNB) stands out in the fast-paced world of gig economy stocks. Even though it made a 36% gain last year, current events have cast a shadow. Airbnb’s latest gift of $10 million to charity is a smart way for the company to get involved in the community. But this is a response to bigger problems in society. At the same time, the company’s plan to make homes more affordable looks more like a defense move. It’s in answer to claims that Airbnb makes housing gaps worse and drives up prices in the area.

With its $200 million purchase of GamePlanner, Airbnb made its first move into AI. AI is an example of a smart use of technology. But compared to bigger problems, it’s a drop in the ocean. The company’s problems with regulations, especially in New York City, show that it has a bad relationship with the government. 

Recent problems with Airbnb make their problems worse. An $8.5 million scam connected to its platform makes people wonder about its operations control. There was no direct fault on Airbnb for certain incidents that happened in Nairobi, but they still hurt the company’s image. These situations show the dangers that come with short-term rentals. They show how important it is for the company to have stronger security and verification measures. Investors need to understand how hard it is for Airbnb to balance growth with social effects and follow the rules. When looking for gig economy stocks to sell, Airbnb’s present path makes it prudent to be careful.

On the publication date, Faizan Farooque did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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