Uber Inc., a car service company is seeking to receive a large investment of $500 million to foster the start-up company’s growth. If they are successful in acquiring this large sum their company’s value could increase to a healthy $12 billion. It has been reported that BlackRock Inc., a multinational investment corporation, General Atlantic, a global equity investment firm and Technology Crossover Ventures, a technology venture firm are all potential investors are all involved in the deal. Uber plans to close a deal within the next few weeks.
If Uber receives the investment they seek, their anticipated value would surpass Hertz Global Holdings Inc. which is valued at $12.8 billion and Avis Budget Group Inc. valued at $5.8 billion. Both Hertz and Avis are two of the largest car-rental companies. Also, Uber would outdo their competitor Lyft financially and in brand growth.
Uber has received over $300 million from investors including Google Ventures, Benchmark and Amazon.com and has also made deals with PayPal and NFL. According to Bloomberg, Uber is looking to raise financing of an estimated $10 billion, however the number is subject to change after negotiations. In the summer of 2013 they reportedly received $258 million in backing and were appraised at $3.5 billion.
The company which started up in 2009, is a ride service that functions through “smart-devices” such as phones and tablets. Once the user downloads their app they can request a ride simply by selecting their location through GPS and specifying the type of car they would like to be picked up in. Their drivers belong to either one of two categories “Uber Black,” or “UberX.” Uber Black drivers are professional chauffer’s who have a commercial license and large black sedans or SUV’s that can seat up to six passengers. UberX drivers are at least 21-years-old with a driver’s license and drive a 4-door vehicle that is in “excellent condition.” Uber collects only 20 percent of the total from each ride while drivers keep the remaining 80 percent.
Although Uber is doing well, their success has taken a negative toll on taxi services. On Thursday afternoon taxi drivers from multiple areas of Boston gathered together outside of Uber’s headquarters and began to protest. Cab drivers fear that they may lose their jobs. Donna Blythe-Shaw, a representative for the United Steelworkers and the Boston Taxi Drivers Association stated that there has been a 35-40 percent decrease in business for cab drivers. This decrease is a result of unregulated ride-sharing companies that are not restricted by many of the regulations that are costly for taxi drivers. In addition to the financial impact that has affected taxi services, there is also concern about the safety of passengers who use Uber as their drivers are unregulated.
Following the protests, Boston’s Mayor Marty Walsh stated that the city is currently evaluating the Safety of Uber’s services as well as other similar ride-sharing companies. A spokesperson for the mayor said that the city is aware of the popularity of Uber and companies like it and plans to come to a solution that would benefit all parties. Uber services are currently offered in over 70 cities and if Uber is successful in acquiring the investment they are seeking, the company’s global expansion will come with ease.
By Sarah Temori