So Uber announced yesterday that it's taking $3.5 billion from Saudi Arabia's Public Investment Fund. Three point five billion, with a b, all from one sovereign wealth fund, and the head of that fund, a guy named Yasir Al-Rumayyan, is getting a seat on Uber's board as part of the deal. This is, by any normal measure, an enormous check. It reportedly puts Uber's valuation somewhere around $62 billion, though depending which report you read the number wobbles a bit, which tells you something about how fuzzy "valuation" gets once you're talking about a private company burning cash at the rate Uber does.
Here's the thing nobody in the coverage I read this morning seemed to want to say out loud: women in Saudi Arabia aren't allowed to drive. Not "culturally discouraged," not "rare" — actually, legally, not allowed. And the country's sovereign wealth fund just became one of the largest investors in a company whose entire business is summoning a car with a driver in it. I've seen a few people online point this out as a punchline, and I get why, but I don't think it's really a punchline. I think it's the most interesting part of the whole story and everyone's burying it under paragraphs about board seats and burn rate.
Uber's own line, when asked, has apparently been that ridesharing could actually be useful for women in Saudi Arabia specifically because they can't drive themselves: a car and driver becomes a form of mobility that doesn't require a license they're not allowed to have in the first place. Which, fine, I can see the logic. It's not crazy. But it's also a pretty convenient bit of reasoning for a company that just took $3.5 billion from the exact government maintaining that restriction. You don't get to be the workaround for a policy and also be financially entangled with the people enforcing it and call that a clean story.
I'll admit I don't have a tidy conclusion here, which is unusual for me, I know. Some days a post writes itself and this one didn't. Uber needs the money — they're apparently still losing something like over a billion dollars a year in the US alone once you account for the driver subsidies and the price wars with Lyft, and international expansion into places like China isn't cheap either. So from a pure "keep the company alive" standpoint, three and a half billion dollars from anyone willing to write the check is probably a rational thing to take. I just don't think "rational for the balance sheet" and "not worth a second look" are the same category of thing, and a lot of the writeups I saw today collapsed them into one.
Unrelated tangent, but related in my head: I spent about twenty minutes last night trying to get an Uber home from a friend's place near the east side and watched the fare estimate jump from $11 to $19 in the time it took me to decide whether I actually wanted to leave. Surge pricing during a completely ordinary Tuesday night, no rain, no event nearby that I could find. I ended up just walking to the bus stop instead, which felt like a small personal victory against an algorithm, and also took forty extra minutes, so who's really winning there.
Anyway. I don't use Uber as much as I used to, partly because of stuff like that fare jump, partly because the local cab company here actually answers the phone now, which feels like it shouldn't be a selling point in 2016 and yet here we are. But I'll be paying more attention to the board announcements out of Uber going forward than I usually do, because a $3.5 billion check from a state fund is the kind of thing that quietly reshapes what a company is willing to say no to later, even if nothing about the app changes tomorrow.
If you want the numbers themselves, they're easy enough to find: TechCrunch, the Journal, and about a dozen other outlets ran the board-seat detail and the funding figure within hours of each other yesterday. I just haven't seen many of them sit with the driving thing for more than a sentence, and it felt worth more than a sentence to me.