Investing in technology stocks like Uber became more popular in 2021, especially Muslim investors started to be curious if this stock is halal. Even though this stock is not included in the top 10 stocks recommended to buy in 2021, Uber is gaining more attention than ever before. In today’s post, we screen Uber and find out if it is halal or not.
Uber Business Activity
Uber Technologies, Inc., known as Uber, develops and operates technology applications in 900 metropolitan areas globally. The company offers ridesharing services and also other transportation services for consumers who want to connect with independent ride service providers. Uber services include a variety of delivery services like food delivery, couriers, and other services like electric bicycle and scooter rental. However, Uber has never owned any vehicles. Instead, it charges a 25% commission for each service it provides.
The company has four segments: Rides, Eats, Freight, and Advanced Technologies Group (ATG), and Other Technology Programs. The Rides segment provides offerings that connect consumers with drivers who offer rides in different vehicles, such as cars, motorbikes, or taxis. The Eats segment helps consumers find local restaurants, groceries, and stores, order products, and have them delivered. The Freight segment is the best way to connect carriers with shippers on Uber’s platform and book a shipment. The last segment, the ATG, and Other Technology Programs offer products that provide access to rides through different modes of transports like electronic scooters. Uber Technologies, Inc. was founded in 2009 and is based in San Francisco, California.
Is Uber stock halal?
Firstly, we check the business activity of Uber. The company’s impermissible business activities comprise only 0.16% of its overall revenue, and 0.00% of its revenue comes from questionable segments. So, we can see that Uber’s non-shariah compliant business activities do not exceed 5% of total revenue, and it is found to be halal.
Secondly, we conduct a financial screening analysis. Of course, we screen the company’s interest-bearing debt ratio. The interest-bearing debt should not exceed 30% of the company’s market capitalization. In Uber’s case, the percentage of interest-bearing debt is 12.97% of its market capitalization. So, we can conclude that it meets the criteria.
| Total Debt | $9.52B |
| Market Cap | $73.38B |
Finally, we need to screen for interest-bearing securities. Uber’s interest-bearing securities account for 10.59% of its market capitalization, and the total amount of securities that earn interest should not exceed 30% of its market capitalization.
| Cash & Equivalents | $7.77B |
| Market Cap | $73.38B |
In conclusion, Uber passes all the criteria for the stock to be halal. Therefore, Uber stock is marked as “Halal” at the Musaffa platform.
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