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Business Impact

Uber Gets $3.5 Billion from a Country Where Women Can’t Drive

Already accused of a litany of questionable practices, the ride-hailing giant is now closely tied to a government that oppresses women.

The government of Saudi Arabia is investing $3.5 billion in the ride-hailing giant Uber. The announcement, which came late Wednesday, makes Uber by far the richest venture-backed company. And by not only taking money from an oppressive regime but also naming Yasir Al Rumayyan—the manager of Saudi Arabia's sovereign wealth fund—to its board, it ups its already impressive list of questionable business tactics to new levels.

Let’s review the company’s rap sheet, just from 2016: It reportedly ignored instances of its customers being sexually abused, came out on top of a legal fight in which drivers tried to get the same rights as regular employees, and was found to be involved in predatory lending practices that stick company drivers who have poor credit with exorbitant lease payments. Two Uber vehicles were set on fire in Nairobi, apparently as an act of violent protest. And the service’s trouble with taxi drivers in France (as well as counterprotests from Uber drivers) is well documented.

The company has shrugged much of this off as a distraction from its mission of re-inventing transportation. It may have a point—the global success of ride-hailing apps is unambiguous, which would indicate that the taxi industry isn’t close to providing customers or drivers with the best service possible.

Riot police in Paris during an anti-Uber protest last summer.

With the Saudi investment, questions will now turn to Uber’s plans for its pile of available cash and assets, which stands at about $11 billion. Breaking into China is on its list, but it faces an uphill battle. Apple just poured $1 billion into Didi Chuxing, the ride-hailing service that currently has the lion’s share of the market in China, and Didi’s president, Jean Liu, said Wednesday that it is working on an investment deal that would best Uber’s. For his part, Uber CEO Travis Kalanick has admitted that his firm’s far smaller Chinese operation burns through about $1 billion a year as it tries to win market share there.

But as the company contorts itself to explain, for example, how taking billions from a country that won’t let women drive is somehow good for women, perhaps it’s time to ask where the line is between a good, hard-nosed business strategy and a company that’s so obsessed with growth it doesn’t mind who it hurts along the way.

(Read more: Wall Street Journal, Fortune, Bloomberg, “Does Uber Have a Sexual Assault Problem?” “Uber and Lyft Are Still Trying to Avoid Acting Like Regular Employers,” “Why Automated Taxis Could Mean Far Lower Emissions”)

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Riot police in Paris during an anti-Uber protest last summer.
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