Uber Just Got a Bunch of Saudi Money. That's Good News for Women Everywhere.
Smart entrepreneurs can minimize pain caused by stupid governments.
Uber just received an investment of $3.5 billion from Saudi Arabia's sovereign wealth fund. A bunch of headlines have cropped up claiming this is bad news for women—an understandable, but utterly backward analysis.
At Forbes, Contributor Rebecca Lindland writes:
My very first thought upon hearing the news was, "This is just another reason/excuse/barrier to not let women drive."
But she immediately undercuts her own argument:
Not that the Kingdom needs another reason or excuse—it's an absolute monarchy after all.
And she's right. Tyrants gonna tyrannize. The debate over whether Saudi women should be be allowed to obtain drivers licenses is utterly medieval and sophistical. It has almost no contact with the reality of protecting women's safety, promoting female virtue, or anything else that is actually happening in 2016. There's a tweet going around that suggests Austin (which recently banned Uber) is now "reactionary" and Saudi Arabia is "progressive." The Austin Uber ban is backward, but there's no universe in which Saudi Arabia is less reactionary than the hipster home of Texas weirdness.
What's more: Uber is already operating in the Kingdom—80 percent of its current customers there are female, for obvious reasons—and there's no cause to think that this investment will do much to change that fact. (The money does come with a seat on Uber's board for Yasir Al Rumayyan, managing director of the fund and a Saudi bigwig, which muddies the water slightly. But that fact is likely to have little impact on the broader debate about letting women get behind the wheel.) More Saudi money to Uber isn't the same thing as more Ubers in Saudi. The Uber money is just another investment by an entity that already has holdings in many, many American companies, not to mention U.S. treasuries.
And Uber CEO Travis Kalanick—not famous for his diplomatic skills—is rather spectacularly unsuited to move the needle on the debate about women's right to travel in the famously closed country. Instead, he can do what entrepreneurs do best when faced with a big stupid chunk of deadweight loss created by government intransigence: he can try to find a way to meet pent-up demand that the jerks in power didn't have the imagination to ban in advance.
While some people were hollering about privatizing the post office, communication got freer and cheaper thanks to phone, fax, FedEx, email, and SMS. The same thing is happening in a more modest way with Uber in U.S. cities, where inefficient and occasionally discriminatory taxi cartels are falling apart thanks to competitive pressure. Those innovations didn't happen entirely outside of the sphere of government influence, but for the most part the technology simply outpaced the rulemakers, to the benefit of nearly everyone.
It would be better if women were legally allowed to drive in Saudi Arabia. Obviously. Obviously! Obviously. Sheesh. (Also, I'm still waiting for UberXX here in the U.S.)
But if Kalanick (and Saudi state investors) think they can make money by providing more, better, cheaper ways for humans to move about more freely in any country, but especially in a country where it's quite difficult for women to travel, that's a net gain. Period.
Asking Uber to reject the investment is a classic example of making the perfect the enemy of the good. Poor women will still be worse off than rich women. Women will still be worse off than men. Assaults, harassment, and rudeness will still occur inside and outside the confines of automobiles, public and private. But a well-funded fast-growing Uber will lessen those problems globally (and in Saudi Arabia), not exacerbate them.