Uber has secured an investment of $3.5 billion from the kingdom of Saudi Arabia. The fund infusion takes the taxi-hailing company’s valuation to $65 billion. However, getting funds from the only country in the world that still restricts its women from driving is a cause of great concern for many.
Ride-sharing app Uber announced this week that it was getting a huge infusion of funding. Interestingly, it wasn’t any of the standard investors that one expects to pour money into such fast rising startups. The funds are coming in through Saudi Arabia.
The Saudi state’s Public Investment Fund (PIF) is putting about $3.5 billion into the privately held company. In return, Uber has granted a seat on its Board of Directors to Yasir Al Rumayyan, reported Code Pink. Rumayyan is the managing director of the Saudi government fund and holds great influence in the funding circle owing to the sheer size of the pool of money that is at his discretion.
Saudi Arabia currently sits on assets totaling $2 trillion. However, majority of the foreign funds flow in the country only because of oil. The country intends to make long term investments in ventures that fund the country’s growth once its oil economy slows down. Saudi Aramco, the state-owned oil company, is the world’s largest company. It is the primary driver for the Saudi state’s economy, but it certainly won’t run forever.
The investment is the largest Uber has received till date. In fact, it is one of the largest ever made in a privately held company. Moreover, the single round of funding is roughly equal to the entire sum received by the entire U.K.’s tech sector last year, noted venture capitalist David Galbraith, reported The Guardian.
Needless to say, the investment hasn’t gone down well with women across the world. Saudi Arabia is the only region in the entire world, where women aren’t legally allowed to drive. Interestingly, there is no specific legislature that bans women drivers. However, religious edicts restrict women from applying for a license. Moreover, the application process to procure a driving license is so convoluted; it makes it virtually impossible for women to get behind the wheel. Incidentally, many women in the interior regions still drive, albeit without a license. Moreover, many women who hold international driver’s license do drive, but mostly as a protest.
Saudi women have been fighting for decades to earn the right to drive. Multiple petitions, acts of civil disobedience, as well as voluntary arrests have had no effect. The women even solicited the King to allow them to drive. Surprisingly, Saudi Arabia’s Deputy Crown Prince Mohammed bin Salman, a powerful voice in the country, recently suggested that “women don’t get their complete rights granted them by Islam,” reported Bloomberg. However, the words have not translated into any change in policy.
Uber benefits significantly due to Saudi Arabia’s gender politics. While the country’s drivers are almost certainly entirely male, Uber’s own figures show their Saudi passengers are more than 80 percent female, reported the Washington Post. Since women can’t drive and mandatorily need a male member, Uber’s services offer a great deal of freedom and mobility. Uber’s taxis are an affordable mode of transportation that these women regularly rely on. Incidentally, realizing the opportunity, many of Uber’s rivals have been aggressively expanding in the region.
Many have questioned Saudi Arabia’s investment in Uber, claiming it allows the country to skirt the core problem of not allowing women to drive. A while back, a cleric had infamously suggested that driving could damage women’s ovaries, reported CNN. The country still follows deep segregation and wouldn’t want a male police officer pulling up a women driver. But a transactional interaction with a male Uber driver appears to be allowed.
[Photo by Fayez Nureldine/Getty Images]