Bite the Hand That Invests in You? Uber Is Facing a Major Dilemma After Saudi Journalist’s Disappearance
Dara Khosrowshahi is facing some rough road. The Uber CEO said Thursday night he’s not going to attend the Future Investment Initiative conference in Riyadh later this month amid questions about the disappearance of a Saudi journalist.
“I’m very troubled by the reports to date about Jamal Khashoggi. We are following the situation closely, and unless a substantially different set of facts emerges, I won’t be attending the FII conference in Riyadh,” Khosrowshahi said in a statement. But Uber still has a $3.5 billion investment and a board member from Saudi Arabia’s Public Investment Fund.
Jamal Khashoggi, a prominent critic of the Saudi government, has not been seen since entering the Saudi Arabian embassy in Turkey on Oct. 2. Turkish authorities have told reporters they believe a team of Saudi security agents killed and dismembered him in the embassy. Saudi Arabia has denied any involvement in Khashoggi’s disappearance.
Khosrowshahi was just one of dozens of prominent business leaders scheduled to speak at FII, dubbed “Davos in the Desert.” Viacom CEO Bob Bakish, Arianna Huffington and Zanny Minton Beddoes, the editor-in-chief of The Economist, have also backed out of the conference. Remaining scheduled speakers include David Bonderman of TPG Capital, Jamie Dimon of JPMorgan Chase, Christine Lagarde of the IMF and Larry Fink of BlackRock, as well as U.S. Treasury Secretary Steven Mnuchin.
Yesterday, Richard Branson said he had suspended talks with the Saudi government regarding a $1 billion investment in his Virgin Galactic and Virgin Orbit space-tourism projects. Branson told The Guardian that the allegations about Saudi involvement in Khashoggi’s disappearance, “if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government.” But unlike Branson, Khosrowshahi and Uber already have strong ties to Saudi Arabia.
In 2016, Uber secured a $3.5 billion investment from Saudi Arabia’s Public Investment Fund, and PIF managing director Yasir Al Rumayyan joined its board of directors. Fortune‘s Dan Primack wrote at the time: “Uber has taken a $3.5 billion investment from a government that effectively prohibits women from driving—let alone driving for Uber. Uber also has accepted a $3.5 billion investment from a government that requires women to have male guardians. Uber also has accepted a $3.5 billion investment from a government whose court system has sentenced men to jail time and corporal punishment for the ‘crime’ of homosexuality—not to mention all of the harsh sentences, sometimes including death, for political protest.
“Moreover, this is no passive investment. By naming political appointee Al Rumayyan, the company has basically invited the Saudi government into its board room. To my knowledge, no other Silicon Valley startup has a director from the sovereign wealth fund of a repressive political regime.”