Uber’s ambitious designs for the Middle East
London - Saudi Arabia’s decision to invest sovereign wealth funds in Uber raised the upstart taxi service company’s profile from just another success story to a contender for global domination in the transportation business.
San Francisco-based Uber Technologies Incorporated on June 1st announced that Saudis’ Public Investment Fund (PIF) had invested $3.5 billion, making it the largest single investor in the firm and one of the biggest investments in a privately owned start-up. Uber is valued at $62.5 billion, making it Silicon Valley’s richest company not publicly traded.
As a part of the deal, PIF Managing Director Yasir al-Rumayya was given a seat on the Uber board of directors, along with company founders Travis Kalanick and Garrett Camp, among others.
“We’ve seen first-hand how this company has improved urban mobility around the world and we’re looking forward to being part of that progress,” Rumayya said in a statement.
Bringing its unique business model to areas searching for economic opportunities and providing a cost-effective method of transport, Uber operates in 15 locations across the Middle East and North Africa (MENA), with plans for significant expansion.
“In October, we committed $250 million to the region and part of that was expanding into more cities in Egypt, Saudi Arabia and Pakistan,” Uber Middle East spokesman Shaden Abdellatif said.
According to Uber, Cairo is its largest and fastest growing market in the MENA region, having expanded more than 200% in the last year. The technology platform creates more than 3,000 work opportunities a month, with 10% of the drivers in Cairo being female, a figure that is growing steadily.
The MENA region does come with challenges. For example, operating in Egypt, where harassment of women is a widespread problem, prompted Uber to work with HarassMap, a mobile application that helps women report and avoid areas of high concentrations of harassment incidents.
“In Pakistan, we also partnered with Rabbt, a social [non-governmental organisation] NGO, to train drivers against sexual harassment and we continue to explore ways with which we can develop social initiatives,” Abdellatif said, adding that Uber is working with a number of NGOs in training drivers to recognise and prevent sexual harassment.
Uber has been operating in Saudi Arabia since early 2014 and, in a society where women are banned from driving, it is no surprise that 80% of Uber’s customers in the kingdom are female. However, with the announcement of the huge Saudi investment in the company, a number of female activists called for a boycott of Uber to bring the driving debate into the spotlight.
Although the Saudi government did not comment on the uproar, an Uber spokesman told the New York Times: “Of course, we think women should be allowed to drive… In the absence of that, we have been able to provide extraordinary mobility that didn’t exist before — and we’re incredibly proud of that.”
Princess Reema Bint Bandar Al Saud, a businesswoman and proponent of women’s rights who recently joined Uber’s international policy advisory board, worked to bring the service to Saudi Arabia. She said the investment by the kingdom is an indicator of positive change.
Two-income households in Saudi Arabia are becoming the norm, with a service like Uber lessening the burden on Saudi males, while giving Saudi women additional mobility options.
The investment by Saudi Arabia is in line with its Vision 2030 economic and social plan, which includes goals to empower women in the work place.
“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.” Kalanick said in a statement.
Uber head of operations in Saudi Arabia, Majed Abukhater, said the company hopes to increase its monthly number of trips 60% in 2016.