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Striking taxi drivers protested Uber and ride hailing on Jan. 26, 2016. Here, someone has written Uber plus Emmanuel Macron, the French Minister of Economy, Industry and Digital Affairs, equals corruption. (Photo: Greg Sandoval).
Striking taxi drivers protested Uber and ride hailing on Jan. 26. Here, someone has written Uber plus Emmanuel Macron, French Minister of Economy and Digital Affairs, equals corruption. (Photo: Greg Sandoval).

In what could be seen as either a vote of confidence or a foolish bet, a group of investors are “piling into a special fund” offered by investment bank Morgan Stanley that will eventually contribute $500 million to Uber’s coffers, The New York Times reported Friday.

What’s different about this group is that they’re willing to plunk down large sums without being provided any specifics about Uber’s finances, according to the Times.

To qualify for the fund, called “The New Riders,” one must possess a minimum net worth of $10 million and invest at least $250,000, the Times reported. To illustrate how big a blind bet these investors are willing to make, the newspaper outlined some of the business challenges faced by Uber, the privately held ride-hailing service valued now at at more than $60 billion.

Uber has yet to say when it plans to file for a public offering. The company has raised $10 billion already but continues to lose money. Last year, as Uber attempted to raise new funding, the company told potential investors that revenue was growing by 300 percent, but acknowledged the company also “generates $470 million in operating losses on $415 million in revenue,” according to a June report in Bloomberg.

Police armed with teargas face off with cabbies protesting against Uber in Paris in 2016. (Credit: Greg Sandoval)
Police armed with tear gas face off with cabbies protesting against Uber in Paris last month. (Credit: Greg Sandoval)

And what about the numerous legal, regulatory and competitive troubles plaguing Uber in  many of the 300-plus cities it operates? In the multiple lawsuits filed against Uber by taxi companies or government agencies, the company is typically accused of violating transportation rules or competing unfairly. Just a few of the places where Uber has faced court injunctions include France, Germany, Spain and the Netherlands.

Just the past week in New York and San Francisco, the “private contractors” that drive people around for Uber are striking to protest company fare cuts.

Nonetheless, Uber apparently looks enough like a future high-flying tech stock, such as Facebook or Google, to persuade the “New Riders” investors to ignore the threats to the company. The consolation for them, if Uber fails to pay off, is few will likely end up in a bread line.

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