At first glance, Uber and Saudi Arabia seem to be an odd pairing. Nevertheless, the disruptive ride-hailing.
The company announced Wednesday that it had received $3.5 billion dollars from the conservative monarchy’s Public Investment Fund in the one of the largest single investment ever in a private company.
Uber, which has operated in Saudi Arabia since 2014, is expanding in the Middle East. The company has committed to investing $250 million in the region, and has over 395,000 active riders and 19,000 drivers in 15 cities and nine countries.
Uber’s global success makes it a good investment for Saudi Arabia’s expanding investment fund, David Ottaway, a Middle East specialist at the Wilson Center, a foreign policy think tank, tells The Christian Science Monitor.
“They’re expanding their investment fund, and looking for acquisitions or investments around the world, and I guess they thought Uber was a good investment,” he says. “It’s been expanding exponentially around the world.”
The investment aligns well with Saudi Arabia’s “Vision 2030” initiative, which aims to reduce dependence on oil, reduce unemployment, and increase women’s participation in the workforce, Uber tells the Monitor in an email.
But the investment has also raised questions about Saudi Arabia’s restrictions on women driving. Although there is no written law restricting women from getting behind the wheel, in practice they are not issued drivers’ licenses, effectively prohibiting them from driving in most areas.
Rebecca Lindland, an automotive industry analyst with Kelley Blue Book, an automotive research company, wrote in Forbes that she believed the investment was another government barrier for women.
“The investment in Uber makes a lot of sense, but a happy side note from the monarchy’s standpoint is that it also provides them with a reason to say ‘we don’t think women should drive because we provided them with this great service,” Ms. Lindland says in an interview with The Monitor.
Around eighty percent of Uber’s riders in Saudi Arabia are women, according to the company.
“We have some data to show that these women are starting to rely on Uber a lot more for their daily commutes; the proportion of trips that we see in Saudi during the weekday is actually very high relative to other locations,” Majed Abukhater, Uber’s Saudi Arabia general manager, told Fast Company.
Natana Delong-Bas, a professor at Boston College and the editor-in-chief of the Oxford Encyclopedia of Islam and Women, tells The Monitor that Uber in Saudi Arabia is a “mixed bag” for Saudi women. She says it could help make more rides available for Saudi women, but added that safety concerns related to Uber are a “major concern” and that Uber remains too expensive for many Saudi women.
Dr. Delong-Bas says the investment may be a “stopgap measure” to continue to prevent women from driving. As the country aims to increase female participation in the workforce, she said the issue of transportation for women needs to be addressed in a society where a majority of people oppose women driving.
“There’s a very real need to put together a multilayered method for transportation for women,” she says. “Is this going to be one piece of the puzzle or is this going to be ‘well, this is how we are going to handle it’ and that becomes the end of the conversation?”
Jill Hazelbaker, an Uber spokeswoman, told The New York Times that “of course” the company thinks 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,” she said.
Lindland says it will likely be many years before women are allowed to drive, as a new metro system is under construction and there is no suitable female police force.
“What would be extraordinary mobility would be women being able to drive, to be able to move around without guardianship,” Lindland says. “That’s extraordinary mobility. This is a bandaid.”
Although the investment may help fill an immediate need, Delong-Bas says there is still progress to be made.
“I don’t think it’s going to provide a definitive, comprehensive answer, especially since they’re facing the need for serious economic development and diversification. I think the driving issue is one that’s going to have to be addressed,” she says.