Ahead of its plans for an IPO, Uber is lining up some big investments from new Chines backers, the Wall Street Journal Reports. Chinese fund manager Hillhouse Capital Group is heading an investment that could come to as much as $1 billion.
Hillhouse is reportedly buying bonds from Uber which can later be exchanged for shares in the company at the IPO price once it becomes publicly traded. So it is sort of a lend to buy deal where lenders can either get their money back or buy shares in Uber.
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But as the Journal points out, there could be a conflict of interest here because the Beijing based Hillhouse Capital Group, one of the biggest fund managers in Asia, is also an investor in major Uber competitor Didi Kuaidi Joint Co., China’s largest taxi-hailing app.
Meanwhile, there is more bad news about Uber’s practices. Apparently its app can track your location even when it is not in use. So Uber can know where people with its app are at all times. The company can also use it to access a person’s contacts in order to send them ads and messages.
The nonprofit research group, the Electronic Privacy Information Center is petitioning the Federal Trade Commission to block Uber from doing so. Its formal complaint opens as follows:
This complaint concerns proposed changes in the business practices of Uber, the largest “ridesharing” service in the United States. In less than four weeks, Uber will claim the right to collect personal contact information and detailed location data of American consumers, even when they are not using the service. These changes ignore the FTC’s prior decisions, threaten the privacy rights and personal safety of American consumers, ignore past bad practices of the company involving the misuse of location data, pose a direct risk of consumer harm, and constitute an unfair and deceptive trade practice subject to investigation by the Federal Trade Commission.
(See the full complaint Here.)
In response, Uber released a statement saying, “We care deeply about the privacy of our riders and driver-partners, and have significantly streamlined our privacy statements in order to improve readability and transparency.”
So the real question for any possible future investor in Uber is: How long amid all of the scandals and complaints will the company be able to maintain its billion Dollar plus valuation?