"I think Uber's management is almost done playing defense. The overhang over insider selling's behind them," the "Mad Money" host said. "That's why I'm betting the stock can go higher from here, which is why it is time, particularly off that bounce off the London low, to do some buying in the stock of Uber."
Shares of Uber closed down around 1.5% on Monday, but had fallen around 6% on news that its license to operate in London was being pulled by regulators who cited a "pattern of failures" that created safety concerns. The ruling is on hold while Uber appeals the decision, which one company manager called "extraordinary and wrong."
London's transport authority cited problems with a change made to Uber's identification systems that allowed unauthorized drivers to upload their photos to the accounts of other Uber drivers. According to regulators, this allowed them to transport riders as though they were the booked driver in at least 14,000 trips.
London is a "gigantic market" for Uber, Cramer said, with 45,000 drivers generating a key portion of the ride-hailing company's European revenue.
Cramer noted that Uber said the 14,000 rides were less than a percent of the rides in London and there has not been any recent incidents.
"This is by no means an open-and-shut case," Cramer said, arguing that is why the stock bounced back during Monday's session.
But more importantly, Cramer said Uber's stock has been able to rebound because its lock-up period is nearly three weeks in the rear-view mirror. Uber went public in May.
Most of those new shares have been digested, Cramer said, including those from former CEO Travis Kalanick, who has sold nearly $1.5 billion worth of stock so far this month.
"You had a lot of people cashing out, but if they're done selling, the stock can rally," Cramer said.
Cramer cautioned against taking an aggressive position in Uber, which has not yet turned a profit and this month reported a quarterly net loss of more than $1 billion.
But Cramer said he believes management has displayed more discipline recently as it attempts to deliver on a pledge to achieve adjusted EBITDA profitability in 2021. That includes a willingness to get out of losing markets — particularly in its food-delivery business, which contributes a "big chunk" of Uber's overall losses, Cramer said.
"For Uber Eats, 15% of their markets account for half of the unit's losses," Cramer said. "That's incredible and it suggests that if they simply drop those markets — or if Uber were to sell the whole business to Grubhub — you could see a gigantic jump in the stock."
Cramer said he understands there is still "tremendous skepticism" around Uber's long-term path to profitability, which, among other things, includes more laws like California's that seek to classify Uber's drivers as employees, rather than independent contractors.
Lyft's stock has climbed nearly 10% since then.