The Saudi state's Public Investment Fund (PIF) was putting $3.5 billion into the company, the largest investment in Uber to date. (File photo)
This week the Silicon Valley-based ride-sharing app Uber announced it was getting a huge new injection of funding. But the money wasn't coming from any of the standard investors from the U.S. tech world.
Instead, it was coming from Saudi Arabia.
The Saudi state's Public Investment Fund (PIF) was putting $3.5 billion into the company, the largest investment in Uber to date. The move has raised eyebrows, however, due to one of the kingdom's most notorious domestic policies: Saudi Arabia is the only country in the world where women cannot legally drive.
While the act of driving for women is not specifically banned, various religious edicts in the country have meant women are restricted from applying for a driving license, effectively making the act of driving illegal for Saudi women. While some women in rural areas do drive without licenses anyway and some women with foreign driving licenses occasionally get behind the wheel (a legal gray area used largely in protest), for the most part women in Saudi Arabia simply don't drive. Polls suggest that support for the policy within the country is mixed.
Uber, of course, does not deliberately restrict female drivers. At the end of 2015, the company said that only 19 percent of the drivers using the app were women but that it was actively trying to increase that percentage. The Saudi government will now be given a direct say in Uber's decision - Public Investment Fund was given a seat on the board as part of the deal - but it seems unlikely that the Saudi investment would limit women drivers on the app in the United States or other countries where women are allowed to drive.
What's more complicated, however, is the role that Uber already plays in Saudi Arabia's gender politics. While the country's drivers are almost certainly entirely male, Uber's own figures show their Saudi passengers are more than 80 percent female. For many women in the country, the app and its competitors offer a chance at greater autonomy. Public transportation in Saudi Arabia is largely poor, and it can be difficult to find a regular taxi at times. Many families can't afford to hire a driver to take women places on their own.
The end result is that if you are a Saudi woman and you want to commute to work or run errands on your own, a ride-sharing app can become an important tool. "There are some [women] that take five to 10 trips with us every day," Mudassir Sheikha, the founder of local Uber rival Careem told the Los Angeles Times last year. "We don't see that kind of traffic anywhere."
Uber has acknowledged the role its app plays in the country, usually portraying it as a strength. In December the company offered free Uber rides to Saudi women during the first election in which they were legally allowed to vote.
"Of course we think women should be allowed to drive," Jill Hazelbaker, an Uber spokeswoman, told The New York Times this week. "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." It's expected now that the Saudi investment in Uber should end lingering questions about the legality of the service in the country.
Saudi Deputy Crown Prince Mohammed has become the figurehead of a widely publicized push (dubbed Saudi Vision 2030) to modernize the Saudi economy and end its "addiction" to oil. The hope is to diversify the country's business world, using the country's vast wealth it has accumulated over the years to invest in profitable ventures and focusing on underdeveloped industries like tourism and arms.
There's a social component at work here, too, most notably in the significant cuts being made to the subsidies given to Saudi citizens. Female citizens are being encouraged to enter the workforce, with Mohammed stating the aim was to increase their participation from 22 percent to 30 percent by 2030. Such moves may soon put the ruling Saudi royals at odds with the country's religious elite, potentially shattering a partnership that has provided relative stability to the country for decades.
The investment in Uber seems to be a sign that the Saudi state is willing to bet big on the country's economic future. How those economic bets will translate socially is hard to predict.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)