On Wednesday, June 1, 2016, Uber gained $3.5 billion from Saudi Arabia, the largest cash infusion ever made in a private company. Venture capital investing has been growing in the Middle East where countries such as Turkey, Egypt and Saudi Arabia are turning to transportation companies, including Careem, Lyft, EasyTaxi and Uber, to boost their economy.
The Middle East has been striving to expand economically in order to decrease the region’s dependence on oil. Countries in the Middle East are dominated by the abundance of this fundamental natural resource and have been experiencing a loss in profits due to the reduction of oil prices since the year 2014. As the world’s leading petroleum producer and exporter, 70 percent of Saudi Arabia’s government revenue comes from oil. In order to diversify their economies, Saudi Arabia, along with other Middle Eastern countries, view improving transportation as a feasible starting point.
Transportation companies seemed a promising investment for Saudi Arabia’s Public Investment Fund, and have proven to benefit the mobility in the country by providing easy access to rides online. Online transportation companies are seen as the "taxis of the next generation" and can be summoned by the click of a button on a smartphone. Apart from urban transportation benefits, the Middle East hopes to see an improvement in its tourism as well as an expansion in its workforce, and looks at its investments as a feat to women’s rights.
Although there is no specific law prohibiting women from driving, conservative Muslims have implemented cultural and religious edicts to ban this practice in Saudi Arabia. The Muslim kingdom has enforced rules of segregation and in an attempt to protect its women, strict regulations on driving are executed. Saudi Arabia, a country where women are not allowed to drive, has been a target for transportation companies like Uber. The companies have gained increasing support in the Middle East, as more than 80% of their riders in Saudi Arabia are women. Saudi Arabia’s investment into Uber is seen as an example of how transportation companies of the new generation can benefit riders, drivers and cities, to push for global economic growth.