Japanese tech giant SoftBank Group has bought a 20 percent stake in Uber, completing a months-long process, according to The Wall Street Journal.
The move drops Uber’s value by about 30 percent from around $70 billion to $48 billion.
The offer comes at a time when Uber has struggled for months with lawsuits, a CEO takeover, and a number of internal struggles. On top of that, Uber has been losing competition to rivals like Lyft in the US, Grab and Didi Chuxing in Asia and Little and Taxify in Kenya.
Uber was hardest hit in September 2017, when CEO Travis Kalanick stepped down after taking an indefinite leave of absence from the company. However, Mr. Kalanick still maintains a seat on the company’s board of directors, where he is surrounded by allies and controls 16 percent of the voting power.
The company had already lost Kalanick’s right-hand man, Senior Vice President of Business Emil Michael. The company also laid off another key figure, Vice President of Technology Anthony Levandowski, who headed the company’s self-driving vehicle efforts.
He had become involved in a lawsuit brought against Uber by Alphabet’s self-driving car subsidiary Waymo alleging theft of trade secrets.
Barely a month after appointment of new Uber CEO, Dara Khosrowshahi, Uber was at it again, dealing with regulators after Transport for London (TfL) revoked the company’s license and was quick to agree that the company had got things wrong along the way.
Apart from London, Uber was also banned in countries like Bulgaria, Denmark, Hungary, China, Italy and Taiwan.
Coming back home in East Africa, the company has had a fair share of its own woes. In 2016 Uber drivers met strong resistance from traditional taxi drivers who threatened to paralyze transport if the government did not drive the Uber taxi services from Nairobi.
The taxi drivers’ put their threats into action, targeting Uber drivers and attacking them. This problem was solved thanks to police intervention and Uber encouraging taxi drivers to embrace technology.
When Uber came to East Africa They launched UberX in Kenya with an original pricing of 60 KES/km, 4 KES/ minute, 100 KES base fare and a minimum fare of KES 300. When Safaricom and Craft Silicon partnered to launch Little, Uber slashed their price by 35%.
However, that decision was not well received by the drivers as they decided to strike forcing Uber to rethink their decision again. Most of the drivers have now opted to using other taxi hailing apps like Little, Mondo and Taxify.
The SoftBank deal triggers new governance terms at Uber that were approved by the company’s board in October. The size of the board will expand from 11 to 17 where two of those seats will go to SoftBank.
Uber is the latest addition to SoftBank’s large portfolio of technology companies. It bought Sprint in 2012, British chipmaker ARM in 2016, and robotics company Boston Dynamics in 2017.
SoftBank also has stakes in major Uber competitors, like China’s Didi Chuxing, Grab in Southeast Asia, and Ola in India. Its new position of power at Uber could pave the way for partnerships with other companies down the road.
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