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Uber Reaches $50 Billion Valuation With New Funding, Report Says

By Heather Somerville, San Jose Mercury News (TNS)

SAN FRANCISCO — Uber has raised another monster round of funding to value the car-booking company at a whopping $50 billion, making it the highest-valued, venture-backed company in the world, according to a report Friday.

Uber, the gorilla of ride-booking apps, has raised close to $1 billion from investors, according a report from The Wall Street Journal. With the fresh round of financing, Uber surpasses Xiaomi to lay claim to the highest valuation among private companies with VC funding. China’s Xiaomi, an electronics company and one of the world’s largest smartphone distributors, is valued at $46 billion.

Uber’s valuation now matches the high-water mark set by Facebook in 2011, when the social network company reached a $50 billion market cap.

With the reported new funding, San Francisco-based Uber, just five years old, has raised more than $5 billion, more than any other VC-backed company. The company had initially planned to raise between $1.5 billion and $2 billion, but closed short of that.

Investors in the latest round include Microsoft and the investment arm of Indian media conglomerate Bennett Coleman & Co., a person familiar with the matter told The Wall Street Journal.

Lyft, the second-largest ride-booking company in the United States, has raised about $1 billion and is valued at $2.5 billion.

The cash flow will likely fuel Uber’s aggressive global expansion, which comes with hefty expenses as the company fights regulators, the powerful taxi industry, and even criminal charges in countries across Asia and Europe. Uber on Friday announced it would invest $1 billion in India over the next nine months to improve operations and expand the number of cities it serves there. Its entry into India has been anything but smooth, and the company has been at odds with authorities in New Delhi since an Uber driver there was accused of rape in December. After the incident, Uber was banned from New Delhi and briefly shut down operations, and the Indian woman who said she was raped sued — one of dozens of lawsuits the company is battling over safety issues and the ways it treats its drivers.

Uber is currently in 58 countries and 311 cities.

Although an impressive sum, the new funding round is far from Uber’s largest. In the first quarter this year, Uber raised $1 billion, nearly 17 percent of the total $6 billion VCs and other funds invested in Silicon Valley, according to data from the MoneyTree Report, a quarterly breakdown of investing by PricewaterhouseCoopers and the National Venture Capital Association, using data from Thomson Reuters. That followed Uber’s $1.8 billion of financing in the fourth quarter last year, which was nearly 28 percent of the total sum — $6.3 billion — invested in the valley during that period, and a $1.2 billion round in the summer of 2014.

Photo: Joakim Formo via Flickr

Transit Proposals In Congress Threaten Projects, Jobs, Critics Say

By Curtis Tate, McClatchy Washington Bureau (TNS)

WASHINGTON — Rail and bus systems across the country could lose nearly half their funding under two proposals in Congress to end federal grants for transit projects.

The legislation, sponsored by Republican Representatives Thomas Massie of Kentucky and Mark Sanford of South Carolina, also could affect more than 750 companies in 39 states that produce rail and bus transit components, including manufacturers in those two states.

According to the American Public Transportation Association, eliminating federal transit funding would put 66 projects at risk. They include light rail and streetcar projects in Charlotte, N.C.; commuter rail in Fort Worth, Texas; and bus rapid transit in Fresno, California.

Transit advocates are pushing lawmakers to continue federal funding for these projects as part of a long-term transportation bill Congress needs to pass this year.

The American Public Transportation Association reported last month that public transit ridership hit 10.8 billion trips last year, the largest in nearly six decades. The group projects that the Sanford and Massie bills would result in a 43 percent reduction in transit systems’ capital funds.

While some conservatives oppose federal funding for transit because of the perception that it benefits only urban areas, Michael Melaniphy, the American Public Transportation Association’s president and CEO, said that rural areas depend on transit systems and transit manufacturing jobs.

“Without federal investment, there will be negative impacts in towns small and large,” he said.

One of those towns could be Mount Pleasant, S.C., in Sanford’s district, where Hubner, a German company, announced plans in December to expand its manufacturing plant, adding 50 jobs. The plant builds parts for commuter trains, light rail vehicles, and buses.

Proterra Inc., an electric bus manufacturer in Greenville, S.C., has supplied buses to transit systems in Seattle; Worcester, Mass.; Nashville, Tenn.; and Louisville, Kentucky. Louisville’s system ordered five Proterra buses in February after receiving a $3.3 million grant from the Federal Transit Administration.

Kentucky also has companies that supply transit systems. Invensys Rail, a subsidiary of Siemens, a German multinational conglomerate, builds signal systems for commuter rail and transit systems and employs more than 500 people in the state.

Since the Reagan administration, 20 percent of the federal Highway Trust Fund has been dedicated to mass transit, or about ten billion dollars a year.

In recent years, however, the highway fund has not been able to cover the cost of annual transportation spending because it relies on a per-gallon federal gasoline tax that Congress hasn’t changed since the Clinton administration.

Rather than raise the tax, currently 18.4 cents a gallon on gasoline and 24.4 cents a gallon on diesel fuel, the Sanford and Massie bills would eliminate or phase out the transit funding and redirect it to highways. The Sanford bill would phase out the funds over five years.

“The bill removes mass transit from the trust fund over a five-year period in order to give mass transit systems time to find and develop dedicated funding sources,” Sanford said in a statement.

While the idea is popular in conservative circles, Sanford and Massie will not have the support of the Republican chairman of the House Transportation and Infrastructure Committee, of which they’re members.

Representative Bill Shuster (R-PA), has publicly said he does not support ending federal support for transit. Nor does Secretary of Transportation Anthony Foxx, who’s testified on Capitol Hill recently in favor of more transit funding.
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AFFECTED PROJECTS

  • Charlotte, N.C. — CityLYNX Gold Line streetcar Phase 2; Blue Line light rail extension
  • Durham, N.C. — Durham-Orange LRT (light rail) project
  • Fort Worth, Texas — TEX Rail commuter rail
  • Sacramento, Calif. — Sacramento downtown riverfront streetcar
  • Fresno, Calif. — FAX (Fresno Area Express) Blackstone, Kings Canyon bus rapid transit
  • Tacoma, Wash. — Tacoma Link light rail expansion

Photo: Richard Gallagher via Flickr