A recently reported Softbank bid for Uber shares underlines the Japanese bank’s interest in ridesharing businesses. Softbank has already provided backing for Grab, the most popular ride-sharing service in South-East Asia. It is also involved with Didi Chuxing, the company responsible for Uber’s failure in China. Didi Chuxing also invested in Grab along with Softbank.
Softbank Bid for Uber Shares Undervalues Uber
The Softbank bid for Uber shares involves a partnership between Softbank Group Corp and a number of other investors. These include General Atlantic and the Dragoneer Investment Group. They hope to take advantage of Uber’s recent poor press to persuade shareholders to sell at a low price.
The offered price values Uber at $48 billion: 30% lower than its last valuation of $69 billion. The group is intending to purchase around 14% of Uber shares at its reduced valuation. Could this be part of a plan for the Japanese Softbank to control the whole of the Asian driverless cab industry? Possibly, but only time will tell!
Some Uber Integrity Issues
Over the past year or so, Uber has been hit by sexism scandals, corporate bullying, and claims of sexual harassment. It was also subject to hacking that revealed the personal data of 57 million clients and drivers. This has a serious effect on the perceived integrity of the company. If that wasn’t enough, Uber’s co-founder and CEO at the time, Travis Kalanick, resigned under pressure. Uber also lost its license to operate in London.
Alphabet Lawsuit Against Uber
Another issue is Alphabet’s lawsuit against Uber for the theft of self-driving car technology. It is claimed that, when alphabet executive Anthony Levandowski left Google, he took documents from Waymo with him. Waymo was Google’s self-driving car unit at the time, and such documents were regarded as intellectual property.
He used this technology to set up Otto, a driverless trucking startup. Otto was purchased by Uber mid-2016. The alphabet is claiming that the stolen documents provided Uber with its (and through it, Google’s) driverless technology.
What if the Softbank Bid for Uber Shares is Accepted?
Should the Softbank bid for Uber shares be accepted, the company plans to hold an initial public offering in 2019. An additional six directors will be added to the current eleven to expand the board. The overall effect of the transaction should help to stabilize Uber. Softbank’s investment should also help the company continue its development of driverless cab technology.