Tags: Uber | fundraising | ridesharing | capital

NY Times: Uber Keeps Raising Billions to Ward Off Smaller Upstarts

NY Times: Uber Keeps Raising Billions to Ward Off Smaller Upstarts

By    |   Wednesday, 22 June 2016 02:05 PM

Taxi app company Uber has raised $15 billion from private investors as part of a strategy to ward off smaller competitors in the ever-growing market for ride-sharing technology, says Andrew Ross Sorkin of the New York Times. 

“Uber’s money-grab is seemingly part of an unspoken strategy to mark its territory,” Sorkin writes. “Every time Uber raises another $1 billion, venture capital investors and others may find it less attractive to back one of Uber’s many rivals: Didi Chuxing, Lyft, Gett, Halo, Juno.”

Uber doesn’t plan to come to the public equity markets to raise money in an initial offering “until as late as possible,” according to its chief executive Travis Kalanick, and that hasn’t deterred funding from Fidelity Investments, Saudi Arabia’s Public Investment Fund, Baidu and Goldman Sachs. Uber also raised cash from debt sales.

“At the moment, Uber’s success has had the opposite effect: It has spawned a long list of rivals,” Sorkin says, “But over time, as the smaller competitors run out of cash — after heavily subsidizing riders in an effort to steal business from Uber — venture capitalists should be less inclined to put up even more cash to go up against Fortress Uber.”

Uber’s biggest competitors are overseas: Didi, the market leader in China that raised $7 billion from investors including Apple, maker of the iPhone.

“The challenge for Uber is breaking into China and India, perhaps the two largest markets in the world,” according to Sorkin. “Uber is currently on track to lose about $2 billion annually in those markets as it heavily subsidizes customers and drivers to gain market share.”

Meanwhile, Uber is fighting a call to require potential drivers to submit to fingerprint-based background checks, saying doing so would discriminate against African Americans and Hispanics seeking jobs.

"Black people are disproportionately targeted and arrested, so they’re fingerprinted at a higher level, " Brandi Collins, media  justice director at civil rights group ColorOfChange, told The Hill. "Because of the fact that the arrest records don’t ever specify whether the person arrested was found guilty [or] innocent or whether those charges were dropped, once the fingerprints are filed they just become this damning piece of evidence that’s often used in a number of ways."

Requirements for licensing Uber drivers vary by location, but according to a 2015 description from California, potential employees are screened through a process that uses names, birth dates, Social Security numbers, and driver and vehicle registration records.

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Taxi app company Uber has raised $15 billion from private investors as part of a strategy to ward off smaller competitors in the ever-growing market for ride-sharing technology, says Andrew Ross Sorkin of the New York Times.
Uber, fundraising, ridesharing, capital
406
2016-05-22
Wednesday, 22 June 2016 02:05 PM
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