Last week, Uber received an investment of $3.5 billion from Saudi Arabia. While it is bigger than Uber’s previous fundraising rounds, Uber has raised a sequence of $1 billion investments over the last few years. However, in the political view, Uber’s decision to take money from Saudi Arabia is a big deal. Aside from a 5 percent stake in the company, Saudi Arabia also gets a seat on Uber’s board.
For people worried about issues like gender equality, customer privacy, and human rights, it’s hard to imagine a worse choice for Uber’s newest board member. The Saudi regime is notorious for its unequal treatment of women, whom aren’t even allowed to drive in the Saudi kingdom, as well as its disrespect for human rights in general.
According to Human Rights Watch, “Authorities subjected hundreds of people to unfair trials and arbitrary detention.” The Saudi government persecutes human rights activists, subjecting them to decade-long prison sentences for advocating political reforms and talking to foreign reporters. There’s every reason to expect the Saudi government to continue its repressive policies in the coming years. And now when the Saudi government violates human rights, Uber will get bad press for it.
The biggest issue for Uber will be Saudi Arabia’s treatment of women. Saudi Arabia is infamous for refusing to allow women to drive and for limiting their ability to go out in public without a male chaperone. Uber is likely to face awkward questions about whether its partnership with the Saudi government amounts to an endorsement of these policies.
Uber CEO, Travis Kalanick is making it clear that he intends to run Uber as an amoral profit-maximizing machine. This could be a huge problem in terms of long-term success. Monopolies inevitably face public scrutiny and pressure for regulation and it will be much more difficult for Uber to resist that pressure if regulators and customers do not have trust and respect for them.
Over the past few years, Uber has faced accusations that it has spied on its customers and suggested digging up dirt on journalists. It has also generated a lot of backlash with massive surge pricing increases on busy nights.
When a new startup shows that they are willing to do anything to win, it is appealing. However, Uber has exploded past the underdog that it used to be. The difference now is that the “take no prisoners” approach to business seems hostile.