The Saudi Arabian royal government’s investment arm is investing a whopping $3.5 billion into Uber. The Saudi Uber investment is the largest “single investment ever made in a private company,” according to the Financial Times. The Saudi Uber deal has put Uber valuation at $62.5 billion, more than the market capitalization of FedEx, Ford Motor Co., and General Motors each.
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The Saudi Uber investment deal will give the Saudi’s Public Investment Fund a 5 percent stake in Uber along with a seat on the board.
Yasil Al Rumayya, managing director of the Saudi public investment fund, will join Uber’s board, giving the Middle Eastern government a stake in one of the hottest firms in the world. Uber plans to use the investment money into global expansion in the region and elsewhere.
“We’ve seen firsthand how this company has improved urban mobility around the world, and we’re looking forward to being part of that progress,” Al Rumayyan said in a statement. Al Rumayyan will join the likes of Kalanick and other directors, including Arianna Huffington.
Saudi Arabia’s women continue to be one of the most repressed female populations in the world. A key goal of Saudi Arabia’s Vision 2030 plan is to double the percentage women in the workforce and bring it to 30%. In spite of a recommendation from the Shura Council (a Saudi Arabia advisory committee), women are circumscribed from driving in the country for fear of spreading “licentiousness,” such as removal of hijab to properly keep one’s eyes on the road. While, there is no particular law that bans women from driving, they are outlawed from obtaining a license. Punitive measures are taken against women who are caught driving. Moreover, it is forbidden for a women to interact with nonfamilial males.
As a part of the Saudi Uber deal, the government aims to double the percentage of women in the workforce by 2030, which would bring it to 30%. Incidentally, Saudi Arabia is the only country on Earth that doesn’t allow women to drive. The Saudi Uber investment will bring social reforms, and here’s why:
As per a news release, the Saudi Uber investment deal will help 80% of Uber’s riders, which are women, who generally avoid hailing taxis due to shaming that comes from hailing a cab in public. The Saudi Uber deal could help more and more women get to work. Currently, Saudi women make up only 13% of the workforce. A statistics cited by a popular business magazine states that 60% of the university population is made up of female students. The needs for the monarchy to get women take up professions has increased more than ever.
“Our experience in Saudi Arabia is a great example of how Uber can benefit riders, drivers, and cities, and we look forward to partnering to support their economic and social reforms,” Uber CEO Travis Kalanick said in a written statement.
Uber faces formidable competition overseas, and the Middle East and South Africa is one region where it aims to dominate. Saudi’s discriminatory practices where women are banned from operating vehicles has led Uber gain a huge market share. Uber operates in the cities of Mecca and Medina, and the capital city of Riyadh, and port cities of Jeddah and Dammam. The Middle East is one of the fastest-growing regions, it has 395,000 riders there and 19,000 actives drivers, a four-fold increase from 2015. The service is expected to be available in several more cities in the near future.
American firms have found themselves in hot waters partnering with the absolute monarchy. According to the Human Rights Watch, in spite of the recent reforms, Saudi Arabia continues to be accused of discrimination against women, an unfair criminal justice system, and mistreating insurgents.