Why this analyst thinks Uber's (UBER) plans for a flying taxi could be undermined by regulation

: uber | Uber Technologies, Inc.  News, Ratings, and Charts

uber – Wedbush analyst sees Uber’s plans for Uber Air as a “regulatory nightmare”.

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Uber (UBER) announced its plans to launch a flying taxi service by 2023, and one analyst can already sees issues.

“That’s a regulatory nightmare,” Wedbush analyst Dan Ives said. “That’s one that sounds good on paper, but … regulators are salivating when they hear that.”

Ives explained that “right now for [Uber CEO Dara Khosrowshahi] and Uber, what investors are focused on is really executing not just on ride-sharing but Eats as well as freight.”

Uber Air brings the company into direct competition with Amazon and Tesla in the autonomous vehicle area “because you’re talking about disruptive technology vendors that are looking to autonomous drones and where this ultimately moves over the coming years,” Ives said.

And like regulatory issues raised by autonomous driving technology, Uber Technologies, Inc. (UBER - Get Rating) Air will face scrutiny as usage evolves.

”Uber’s platform continues to be what I call the Amazon transportation today,” Ives said. “That speaks to some of the opportunities down the road, but no doubt regulators are going to have a field day with this.”

Ives added that “it’s obviously one of their initiatives, when you look down the road, but I think timing continues to be the issue here because we’re still talking about something that’s four or five or six years away.”

UBER shares were trading at $43.23 per share on Friday afternoon, down $1.08 (-2.44%). Year-to-date, Uber Technologies, Inc. (UBER - Get Rating) has gained 3.99%, versus a 16.24% rise in the benchmark S&P 500 index during the same period.

This article is brought to you courtesy of Yahoo! Finance.

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