UBER UPDATE INTL
UBER BUYS RIVAL CAREEM IN $3.1B DEAL TO DOMINATE THE MIDDLE EAST
Uber will spend $3.1 billion to acquire Middle East rival Careem, buying dominance in a competi- tive region ahead of a hotly anticipated initial public offering. Uber said that it would pay $1.4 billion in cash and $1.7 billion in convertible notes in a deal that gives it full ownership of Careem’s mobility, delivery and payments business across the greater Middle Eastern region, which includes operations in Egypt, Jordan, Pak- istan, Saudi Arabia and the UAE. The long-expected agreement ends more than nine months of start-and-stop negotiations between the two companies and hands Uber a much-needed victo- ry after a series of overseas divestments including pulling out of major markets such as China and selling its business in Southeast Asia to Grab last March. The acquisition makes Careem a wholly owned subsidiary of Uber and will keep the Careem brand and app intact, at least initially. Careem had raised less than $800 million from investors and as of October had a $2 billion valuation. Its backers include German car maker Daimler AG, Chinese ride-hailing company Didi Chuxing, Japanese internet company Rakuten Inc and Saudi investor King- dom Holding Company. The deal is expected to close in the first quarter of 2020, the com- panies said, meaning it will not be reflected in Uber’s first couple of quarterly earnings releases as a public company. Uber will kick off its IPO and is expected to receive a valuation of at least $100 billion. The agreement is subject to regulatory approval, including by antitrust officials in the countries where Careem operates, which could prevent the deal from moving forward or compel the compa- nies to modify the terms. “This is an important moment for Uber as we continue to expand the strength of our platform around the world,” Uber CEO Dara Khosrowshahi said in a press release. “With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becom- ing one of the most successful startups in the region.”
TOYOTA, SOFTBANK FUND, DENSO INVEST $1 BILLION IN UBER
Japan’s top automaker Toyota, auto parts maker Denso and internet company SoftBank’s investment fund are investing $1 billion in car- sharing Uber’s technology unit. The New York Times reports that Toyota Motor Corp. and Denso Corp. will together invest $667 million and SoftBank Corp.’s Vision Fund will contribute $333 million in Uber Technologies Inc.’s new entity, Advanced Technologies Group, or Uber ATG, which will try to develop and commercialise automated ridesharing services. The move comes as Toyota steps up such efforts, including invest- ing $500 million in Uber, based in San Francisco, and setting up a $20 million joint venture with SoftBank to create mobility services, both announced last year. Toyota also promised to contribute up to $300 million more over the next three years for developing next-generation autonomous vehicles and services. Toyota Executive Vice President Shigeki Tomoyama said working together will help bring down costs and speed up development.
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UBER SPENT $2M TO PUSH NYC CONGESTION CHARGE
Uber was the biggest backer of a campaign pushing for congestion charging in New York City, emerging as an unlikely champion of a levy on vehicles in US cities grappling with the way to deal with heavy car traffic clogging the streets and contributing to pollution. The Financial Times reports that Uber, which spent $2m lobbying for the levy that will come into place in two years, had also backed previous unsuccessful efforts to pass congestion charges. The New York congestion charge, which is expected to raise billions of dollars to fund the city’s ailing public transport systems, was recently suc- cessfully adopted into the state budget. Uber sued New York in February over a cap on for-hire vehicle licences the city council passed last year. During the New York cam- paign, Uber lobbied lawmakers, ran television ads and contributed $700,000 to the advocacy group Fix Our Transit. In September Uber committed $10m over three years to support what it calls “sustainable mobility” by advocating for congestion charges as well as better parking regulations. Lyft is also backing congestion pric- ing schemes. In contrast, New York’s taxi drivers have opposed congestion pricing, arguing it puts even more strain on them while they handle disruption from rivals. Less traffic means shorter wait times for Uber’s passengers. The ride-hailing company is also betting on a broader shift away from private car ownership to other forms of transportation it offers, including shared rides, bikes and scooters, and to public transit. Uber says many customers combine an Uber trip with the bus or subway.
QUEBEC PROTESTS STOP AS MAN HARMS HIMSELF ON TV
Quebec’s taxi industry announced last month an immediate suspen- sion of all pressure tactics to protest against the provincial government’s proposed reform of the industry after a taxi permit holder committed an act of self-harm on live television. According to the Montreal Gazette, the Quebec Taxi Intermediary Reunion (RITQ) said the decision to suspend the pressure tactics was to protect permit owners from enduring more psychological stress. That stress seemed to manifest itself in dramatic fashion when a taxi permit owner being interviewed on live television on the TVA network appeared to slash his wrist in protest of the Legault government’s reform of the taxi industry. RITQ had planned to have drivers offer free rides to passengers until 7 p.m. to illustrate the unfair competition they have to face from Uber. Another aim of the protest was to deprive the govern- ment of tax revenue from that day’s fares. Transport Minister François Bonnardel issued a statement saying he was upset by the taxi driver harming himself. “I am also touched by the testimonies and human stories that have been reported in the media,” Bonnardel said. “Every day, I reiterate the importance of promoting an open dialogue to ensure a smooth transition and sustain the traditional taxi industry.” Bonnardel said discussions are ongoing between the taxi industry and the government, and will continue in the coming weeks. “Let’s give our dialogue a chance to succeed,” Bonnardel said. Quebec cabbies are calling for the total withdrawal of Bill 17, saying its $500-million compensation package for lost value on taxi per- mits is insufficient and that the deregulation of the taxi industry will cost them their jobs.
MAY 2019
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