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Uber Raises $3.5 Billion From Saudi Arabia (fortune.com)

Posted by BeauHD on from the cold-hard-cash dept.

An anonymous reader writes: Ride-hailing giant Uber announced Wednesday that it had closed $3.5 billion in new funding from Saudi Arabia's Public Investment Fund in an effort to shift the country's reliance on oil revenue. Also part of the deal, Public Investment Fund managing director Yasir Al Rumayyan will join Uber's board. The funding will not affect Uber's valuation of $62.5 billion. The company has said in the past that it plans to invest $250 million in the Middle East, where it currently operates in 15 cities across nine countries. Last week, Uber formed a "strategic partnership" with Toyota to provide its drivers with more affordable car purchase and lease terms.

66 comments

  1. Where women aren't allowed to drive by rossdee · · Score: 4, Insightful

    FP?

    1. Re:Where women aren't allowed to drive by ShanghaiBill · · Score: 4, Interesting

      So what happens when Saudi Arabia gets self-driving cars? Will unescorted women be allowed to use them?

    2. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      or be in vehicles with strange men

    3. Re:Where women aren't allowed to drive by kauaidiver · · Score: 1

      I think they can drive with Burkas, but that's like driving drunk is modern countries. And if you're a drunk female Burka driver might as well drive off a cliff and get it over with.

    4. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      Don't worry. In the west, feminists will be demanding such laws in the future.

    5. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      Mod Parent Up.

      I don't think the *****ISLAMIC KINGDOM***** has thought this through to completion.

    6. Re:Where women aren't allowed to drive by tlhIngan · · Score: 1

      I think they can drive with Burkas, but that's like driving drunk is modern countries. And if you're a drunk female Burka driver might as well drive off a cliff and get it over with.

      period. They also must wear burkas when in view of the public - so the moment they step outside they must be fully dressed. Not wearing one, or driving is a crime and there have been cases tried under Shariah law.

    7. Re:Where women aren't allowed to drive by tlhIngan · · Score: 3, Informative

      HTML fail... here;s the post again.

      I think they can drive with Burkas, but that's like driving drunk is modern countries. And if you're a drunk female Burka driver might as well drive off a cliff and get it over with.

      .

      No, they're not allowed to drive, period. They also must wear burkas when in view of the public - so the moment they step outside they must be fully dressed. Not wearing one, or driving is a crime and there have been cases tried under Shariah law.

    8. Re:Where women aren't allowed to drive by ContextSwitch · · Score: 2
      I work for an engineering company that does business in Saudi Arabia, I have been there myself and I have sent female engineers there, with their consent, obviously.

      There is no law that requires women to wear a burka. Basically, to be seen in public a woman must:
      1. Be escorted by a man
      2. Be covered from neck downwards
      3. Have their hair covered, some form of light head-scarf is enough
      Women are not allowed to drive but exceptions can be made. Actually, driving over there is not for the faint-hearted but that's another story. It's a country torn between its modernising royal family and its regressive clerics. You can see them trying to do the right thing and then failing; it's a delicate power balance.

    9. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      Driving is obviously not a crime under Islamic law since every other Muslim country allows it - more than 98% of the Muslims in the world are not Saudi. Since it's not a religiously mandated rule, "sharia" law is not the correct term. There has been a lot of controversy over this law and public opinion is changing in favor of repealing it.

      Also, it's not mandatory to wear a burka and most foreigners don't. It is required to cover your head and the rest of your body. This rule is enforced more in some areas of Saudi than in others, and this is also changing.

    10. Re:Where women aren't allowed to drive by PPH · · Score: 1

      public opinion is changing in favor of repealing it.

      Even among a lot of younger Saudis.

      --
      Have gnu, will travel.
    11. Re:Where women aren't allowed to drive by Khashishi · · Score: 1

      Where better to operate a taxi service?

    12. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      Excepting that their 'modernising' royal family has a partnership with their regressive clerics dating back to the founding of the Saudi kingdom. The Sauds derived their legitimacy from their partnership with the Wahabis, and that's one of their few claims to legitimacy in a country where being Islamic matters over everything else. Already, the royal family is often accused by the al Qaeda supporters of a blasphemous relationship with the Infidel West, and they combat that, aside from repression, by enforcing the diktats of the clerics

    13. Re:Where women aren't allowed to drive by Anonymous Coward · · Score: 0

      No, they're not allowed to drive, period. They also must wear burkas when in view of the public - so the moment they step outside they must be fully dressed. Not wearing one, or driving is a crime and there have been cases tried under Shariah law.

      I heard an interview with a Saudi woman explaining that it really isn't a problem for Saudi women to not be allowed to drive because they just get their "slaves... err I mean servants to drive us."

      Saudi women, meaning actual Saudi "citizens" or members of the royal family, are mostly fine with the current system because they are at the top of a pyramid of luxury. The problems in Saudi society aren't felt by "Saudis" they are felt by the millions that serve and are oppressed by them. It is felt by the minorities that are persecuted. It is felt by those that wish to practice a religion other than an extremist form of Islam. It is felt by the servant migrants who aren't even allowed to leave the country when they want to go home.

    14. Re:Where women aren't allowed to drive by mjwx · · Score: 1

      I work for an engineering company that does business in Saudi Arabia, I have been there myself and I have sent female engineers there, with their consent, obviously.

      There is no law that requires women to wear a burka. Basically, to be seen in public a woman must:
      1. Be escorted by a man
      2. Be covered from neck downwards
      3. Have their hair covered, some form of light head-scarf is enough
      Women are not allowed to drive but exceptions can be made. Actually, driving over there is not for the faint-hearted but that's another story. It's a country torn between its modernising royal family and its regressive clerics. You can see them trying to do the right thing and then failing; it's a delicate power balance.

      Like all third world nations, laws are selectively enforced. Some areas will be more liberal, others will be more strict. This is especially volatile as the Saudi religious police (mutaween) are partially volunteer. Governance is provided by the Committee for the Promotion of Virtue and the Prevention of Vice.

      I've also done business in Saudi, in places where westerners are common the religious laws are relaxed on Saudi's (they don't really apply at all to westerners, the worst that will happen is a woman is deported or a man gets canned... the same shit happens in Singapore). However out in the sticks where the oil rigs are, things are a lot more strict. As I said, many of the religious police are volunteers and the further away from Riyadh you get the more tribal/feudal it becomes. Powerful families taking on official roles like the religious police is often used as a way to maintain power and maintain a veneer of loyalty to the state at the same time.

      As much as I dislike them, if the house of Saud falls, Saudi Arabia will fall into tribal warfare like Iraq and Afghanistan.

      It's a country torn between its modernising royal family and its regressive clerics. You can see them trying to do the right thing and then failing; it's a delicate power balance.

      I wouldn't say torn, but there is a rift between traditionalists and modernists. Most Saudi's are actually pretty sick of Wahhabists, but they're keeping the king in power and that keeps the country from turning on itself. The House of Saud wants to modernise, but by the same token it's the Wahhabists keeping order where they wont be able to. The worst part is, the Wahhabists know how much power they hold.

      --
      Calling someone a "hater" only means you can not rationally rebut their argument.
  2. frost piss by Anonymous Coward · · Score: 0

    frost piss

  3. Of course by Anonymous Coward · · Score: 1

    That country funds many similar organizations......

  4. Why such a high valuation by Anonymous Coward · · Score: 0

    They are basically just middlemen, and the middle man is software....

    1. Re:Why such a high valuation by Anonymous Coward · · Score: 0

      Because dot-com bubble 2.0, that's why.

    2. Re: Why such a high valuation by Anonymous Coward · · Score: 0

      And self-driving cars will be the final nail in the coffin for Uber.

    3. Re:Why such a high valuation by gnupun · · Score: 1

      Isn't the internet essentially about middlemen (as software)? /. is a middleman between me and you. Amazon is a middleman between product manufacturers and consumers. Isn't youtube a middleman between video content producers and video watchers?

      It's quite funny that in most cases the end producers make between 0% and 20% and the middleman makes 80% or more.

    4. Re: Why such a high valuation by Anonymous Coward · · Score: 0

      And self-driving cars will be the final nail in the coffin for Uber.

      You've apparently missed the article some months back where Uber wants a fleet of self-driving cars so that they don't have to pay drivers at all.

  5. So . . . by Anonymous Coward · · Score: 0

    Saudi Arabia starts investing in ride-sharing which currently relies on gasoline, and will likely remain dependent on gasoline in the near future. Why invest in production when you can invest in consumption instead?

    1. Re: So . . . by Anonymous Coward · · Score: 0

      Fight for peace, fuck for virginity...

    2. Re:So . . . by Dunbal · · Score: 1

      Please show me the transportation method that uses magic fairy dust and not petroleum products or derivatives. Including electricity which is (still) mostly petroleum except maybe in Germany.

      --
      Seven puppies were harmed during the making of this post.
  6. Backwards nation that is dying by schwit1 · · Score: 1

    The country is owned by a corrupt royal family of a medieval autocratic monarchy. The price of oil is in the tank and they just had their first ever bond sale to raise cash.

    1. Re:Backwards nation that is dying by Rei · · Score: 3, Insightful

      Of course, the price of oil is in the tank largely because they want it to be. They're trying to squeeze small US and Canadian producers out of business as well as hit Russia.

      --
      Maybe, but I can barely make out what you're saying because your horse is too high.
    2. Re:Backwards nation that is dying by alvinrod · · Score: 1

      All of those countries will be able to weather the storm. However, it will probably result in Venezuela having a coup of some sort or descending into civil war.

    3. Re:Backwards nation that is dying by jrumney · · Score: 2

      They're trying to squeeze small US and Canadian producers out of business as well as hit Russia.

      If that was their intention, they would have done this long ago. They are actually trying to squeeze Daesh, who get a large portion of their funding from the oil fields in Iraq and Libya which they've taken over, and are a much bigger threat to the Saudi regime if they are allowed to expand further.

    4. Re:Backwards nation that is dying by AaronW · · Score: 4, Insightful

      They're mostly trying to squeeze their mortal enemy Iran after the lifting of sanctions. They see little downside in the long term since it hurts the other oil producers as well. SA doesn't particularly like Russia especially after they invaded Afghanistan (SA encouraged people to wage jihad against the Soviet invaders and helped create the Taliban).

      I'm hoping that with less income will help curtail SA's influence on Islam from their puritanical Wahhabism which has encouraged a lot of violence. Their madrases funded by oil money have pushed their puritanical views far and wide throughout the islamic world.

      --
      This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
    5. Re:Backwards nation that is dying by rtb61 · · Score: 2

      Currently their plan to get away from oil, for the ones at the top only of course, is to become an economic parasite, using investment capital from oil, to bleed other countries economies for ever, whilst contributing nothing positive to those economies, ever. It is looking like given recent developments, they might not have that much left to investment, as the the house of Saud royals are about to get royally screwed in US courts and will have to pay the rest of the world for the harm the House of Saud has caused.

      --
      Chaos - everything, everywhere, everywhen
    6. Re:Backwards nation that is dying by rockout · · Score: 4, Informative

      They're trying to squeeze small US and Canadian producers out of business as well as hit Russia.

      They are actually trying to squeeze Daesh,

      They're mostly trying to squeeze their mortal enemy Iran

      Interesting that these three Slashdot foreign policy experts all disagree on the Saudis' motives. It's almost as if they have no fucking idea what they're talking about.

      --
      I've learned that they're worthless, so I don't read AC comments anymore.
    7. Re:Backwards nation that is dying by K.+S.+Kyosuke · · Score: 2

      It's almost as if they have no fucking idea what they're talking about.

      Actually, they often don't. :D

      --
      Ezekiel 23:20
    8. Re:Backwards nation that is dying by dbIII · · Score: 2

      Countries yes, but there's a lot of unemployed people from the US oil industry at the moment who probably want a little more than knowing that their country can still keep on going without them having jobs.
      If they hadn't put up so much in political donations we'd be looking at the House of Saud as something very different to being an ally.

    9. Re:Backwards nation that is dying by dbIII · · Score: 1

      They are actually trying to squeeze Daesh

      They FUNDED that bunch until not very long ago!

    10. Re:Backwards nation that is dying by rockout · · Score: 1

      The "they" in my post referred to the Slashdot users, not the Saudis, but thanks for cramming in the off-topic religious opinion of a random Muslim cleric. As if we don't have Christians in the good ol' USA claiming pretty much the exact same thing?

      --
      I've learned that they're worthless, so I don't read AC comments anymore.
    11. Re:Backwards nation that is dying by Applehu+Akbar · · Score: 1

      "They are actually trying to squeeze Daesh,"

      The King may be trying to squeeze Daesh. An unknown, perhaps large number of Saudi's accountable-to-no-one princes support and fund ISIS.

    12. Re:Backwards nation that is dying by Fire_Wraith · · Score: 2

      You're missing the country they want to hit most of all - Iran.

    13. Re:Backwards nation that is dying by Anonymous Coward · · Score: 0

      The country is owned by a corrupt royal family of a medieval autocratic monarchy. The price of oil is in the tank and they just had their first ever bond sale to raise cash.

      They are also under increased threat from Iran as a result of the US tilting towards Iran and against them. Iran re-entering the oil market just makes it less likely for the Saudis to recover, and more difficult to bribe their restive populace. Add to that Iran inciting Shia insurgencies like in Yemen, and the stage is ripe for that country to be another satellite state of Iran, like Iraq or Syria

    14. Re:Backwards nation that is dying by rockout · · Score: 1

      Oh look, a fourth Slashdot foreign policy expert rears his head and knows all about the motivations behind the Saudis' current policy of keeping oil prices low. Pity that you're typing on a web forum rather than working in the State Dept.

      --
      I've learned that they're worthless, so I don't read AC comments anymore.
    15. Re:Backwards nation that is dying by Rei · · Score: 1

      I don't know about other people, but my father is a president of an oil company and I was just chatting about this issue with another former oil exec, so....

      The US has been en route to become the world's largest producer. Canada's been on a big upswing as well. Most of this production costs significantly more per barrel than what Saudi Arabia can produce it for. Hence Saudi Arabia can crush them by flooding the market. It's not painless to Saudi Arabia, mind you, it's definitely hurting their budget. But they can start to raise the cost somewhat as their competition dies off.

      Concerning Russia, they've long been a thorn in Saudi Arabia's side (and indeed, all of OPEC). They've driven that thorn in and twisted with the Syria conflict, having undone most of what Saudi Arabia had been working toward with their bombing campaign and increased weapons shipments. The decreased oil price has done more to hurt the Russian economy than all of Europe and America's punitive actions combined.

      That said, the Iran reason (and to a lesser extent, Iraq) is indeed worth mentioning. Daesh, not so much. They're such a trivial producer (and most of their production capability has been since destroyed) that it's not a meaningful way to fight them, it's much cheaper just to fund others to attack them.

      --
      Maybe, but I can barely make out what you're saying because your horse is too high.
    16. Re:Backwards nation that is dying by Rei · · Score: 1

      No, this is a common myth. Saudi has always been in opposition to Daesh. Their dog in this game is Ahrar ash-Sham, who works with the US's dog in the game, the FSA. Note that each of these have a number of subgroups.

      While the FSA has until recently been rather undersupported by the US, Ahrar ash-Sham has always received ample patronage from Saudi Arabia and its allied gulf states. And while the US has often tried to keep the FSA on a leash to mainly fight Daesh, Saudi supports Ahrar ash-Sham's fight against both them and Assad.

      --
      Maybe, but I can barely make out what you're saying because your horse is too high.
    17. Re:Backwards nation that is dying by dbIII · · Score: 1

      Let me rephrase that - Saudi individuals funded Daesh and it wasn't until around a year ago that barriers were put in their way.

    18. Re:Backwards nation that is dying by Rei · · Score: 0

      Daesh really hasn't gotten that much external funding from big donors, from what it known. It's a fair bit of small donor external funding, but most of its funding has been from oil revenues and, to a lesser extent, taxes (as well as side streams from selling antiquities, slaves, etc). It really has been running what is effectively a state. A state that has always been against Saudi Arabia (they consider themselves the rightful rulers of Mecca and Medina).

      It's true that the tensions have ratcheted up in the past year, though. While Daesh's first attacks within Saudi Arabia were in 2014, they didn't start suicide bombings there until last year. And at first Shia were the only target, it was only in the past year that they switched to hitting Sunni targets as well.

      --
      Maybe, but I can barely make out what you're saying because your horse is too high.
    19. Re:Backwards nation that is dying by dbIII · · Score: 1

      You appear to be more up to date on this issue than I am.

  7. Sovereign wealth funds. by galabar · · Score: 1

    I assume that Uber will now receive special treatment in Saudi Arabia, as the country, itself, is invested in the company. I sure hope no one sees that as a good idea.

  8. If YOU'RE Girl by Anonymous Coward · · Score: 0

    U can DRIVE.... In a BURKA!!!!

  9. What? by WyldPhyr · · Score: 0

    So Saudi Arabia is shifting away from reliance on the oil industry by investing in a company that relies on gasoline? How does that make sense?

  10. shift the country's reliance on oil... by bkmoore · · Score: 2

    If they want to shift their reliance on oil, shouldn't they be investing in modern, relevant education, ending intolerance, and growing their own economy? Or lets just park all this money in foreign investments... it's much easier.

  11. They have customers, drivers, brand, proven plan by raymorris · · Score: 2, Informative

    Their primary asset is their customer base, and their proven ability to get more customers. Your right that the software, the core is the business, could be reproduced for under a million dollars. Getting millions of customers and putting together a team who can consistently run the business so succesfully is quite a bit more difficult.

    Ultimately the value of a company (to an investor) is based on a) their projected profit over the next five to ten years or so and b) how consistently they meet projections. Uber's revenue has been more than doubling each year, and they've hit pretty close to their projections. They achieved profitability in the US just a couple of months ahead of schedule.

    On the other hand(s), their current numbers don't justify a $50 billion valuation, especially given the legal issues - most cities do in fact have licensing laws for taxis and car services. (Love the laws or hate them, the laws do exist.) The investment money is increased by the fact that people want to invest in the hot new thing, Uber is hip.

  12. seems excessive by frovingslosh · · Score: 3, Funny

    3.5 billion? Didn't anyone warn the Saudis about "surge pricing"?

    --
    I'm an American. I love this country and the freedoms that we used to have.
    1. Re:seems excessive by h4ck7h3p14n37 · · Score: 1

      Isn't surge pricing a good thing? By increasing prices during periods of high demand you ensure that there will be rides available to people that really need them.

    2. Re:seems excessive by Khashishi · · Score: 1

      s/really need/can afford/

  13. Fingerprints? by Anonymous Coward · · Score: 0

    Will KSA require their Uber drivers to have fingerprints on file?

  14. Uber is everywhere by hcs_$reboot · · Score: 1

    Uber interested in self-driving cars, Uber makes partnerships with Toyota, and here and there... Regardless what one may think about Uber, they're definitely a very dynamic company with a promising future.

    --
    Slashdot, fix the reply notifications... You won't get away with it...
    1. Re: Uber is everywhere by Anonymous Coward · · Score: 0

      Once self-driving cars are here, you don't need Uber anymore. Uber is toast when that day arrives.

    2. Re: Uber is everywhere by hcs_$reboot · · Score: 1

      Uh no. Precisely the point of my post: 1) Uber will be part of the self-driving business, 2) Uber diversification 3) you should really use a handle and stop posting as AC, that'll improve your life in a way you don't comprehend

      --
      Slashdot, fix the reply notifications... You won't get away with it...
    3. Re: Uber is everywhere by Anonymous Coward · · Score: 0

      Self-driving cars won't exist without Über's data.

  15. Re: They have customers, drivers, brand, proven pl by Anonymous Coward · · Score: 0

    Their customer base? You mean people like me who have Uber, Lyft, and other ride sharing apps on my phone? And I always go with the cheapest. There's no reason to be loyal to Uber. Any dimwit can drive from point A to point B. Cheapest wins.

  16. Remembet by Anonymous Coward · · Score: 0

    Taking an uber cab supports terrorism

  17. That's it by Dunbal · · Score: 1

    Well no more uber for me.

    --
    Seven puppies were harmed during the making of this post.
  18. What's so special about Uber? by h4ck7h3p14n37 · · Score: 1

    I ask this as someone who's only used traditional taxicabs, what exactly is so special about Uber?

    What do they offer that can't be duplicated by a competitor? The smartphone app, the pricing algorithm? Brand name recognition?

    1. Re:What's so special about Uber? by will_die · · Score: 1

      benefits are: The app showing you location of nearby cars and where they are in relationship to you, cheaper prices and no need to tip, the hipster nature of it.

    2. Re:What's so special about Uber? by Anonymous Coward · · Score: 0

      In the US, one gets the same option with both Lyft, and Curb (for taxis)

    3. Re: What's so special about Uber? by Anonymous Coward · · Score: 0

      You are still supposed to tip!

    4. Re:What's so special about Uber? by Anonymous Coward · · Score: 0

      Clean passenger cabin. Friendly drivers - they'll ask if the volume of the music is ok, if the genre of music is ok, if the temperature is ok. They'll offer me a bottle of water, sometimes a mint or a candy. Traditional cabs, OTOH, have always been horrendous. Often smelling of last night's vomit. Inoperable seatbelts - a real shit show. I live in Mexico for context.