SoftBank Capital, a major investor in the website Buzzfeed, is also backing two Asia-based ride-sharing companies to form a “global taxi alliance” to compete against Uber, adding another twist to a war of sorts between Buzzfeed and the ride-sharing company.
Making the story even more strange, Buzzfeed itself reported SoftBank’s investment in the global taxi alliance in an article on Sunday, though the piece initially failed to disclose that the venture capital firm was invested in the news website.
SoftBank and several partners have invested $46.3 million in Buzzfeed since 2008 in four separate funding rounds, according to Crunch Base. The most recent investment was made in January 2013. SoftBank’s website and its Twitter feed show that the company routinely touts Buzzfeed’s progress.
As Buzzfeed reported, SoftBank has also invested $460 million total in OlaCabs and GrabTaxi, two Asia-based companies which are leading the effort to set up what Buzzfeed labeled a “global taxi alliance against Uber.”
SoftBank’s investments are noteworthy because of Buzzfeed’s coverage of Uber, which has been notably aggressive, and, according to The Federalist’s Sean Davis, consists of “numerous…hit pieces.”
With its coverage of the ride-sharing industry, Buzzfeed, with its estimated 150 million unique monthly views, is arguably one of the more influential voices in the fledgling sector.
The site is not alone in its adversarial coverage of Uber. Other sites such as Pando Daily and Gawker have been critical of Uber for a variety of reasons ranging from CEO Travis Kalanick’s free-market ideology to the company’s marketing methods.
Buzzfeed’s coverage heated up in November after editor-in-chief Ben Smith reported comments made by Uber executive Emil Michael at a dinner in New York City in which he spoke about funding an initiative to investigate reporters who criticized Uber.
Uber executives apologized for the remarks, but insisted that the company had no serious plans to begin such a program.
But Smith’s article — taken along with Buzzfeed’s other reports on Uber — led to accusations of a conflict of interest after it was revealed that Buzzfeed executive chairman Ken Lerer is invested in Sidecar, another Uber competitor.
In an argument on Twitter with The Federalist’s Davis, Smith defended the decision not to disclose Lerer’s investment, writing “We disclose when we cover investors; not every company they invest in. (how would we even know?)”
Buzzfeed did not initially abide by that rule when the article about SoftBank’s investment in the Uber competitors was published. A disclosure was added to the bottom of the article Monday morning.
Buzzfeed’s Smith did not respond to The Daily Caller’s request for comment. Uber also did not respond to a similar request.
According to Buzzfeed, OlaCabs and GrabTaxi are web-based apps which utilize traditional taxi drivers. Uber is different in that it uses private contractors who use their own vehicles to pick up fares. OlaCabs and GrabTaxi, which compete with Uber in several markets in Southeast Asia, are working to develop knowledge sharing and cross-booking capabilities.
One concern traditional taxi companies have — in Asia and across the world — is that companies like Uber charge rates that are lower than standard taxi fares.
While that is a boon for consumers, it undercuts taxi companies.
“Our growth is hindered by the regulations that we follow,” GrabTaxi co-founder Brian Cu told Buzzfeed. “So we can’t expand the way Uber expands their supply base because we only work with regulated fees.”
Flywheel, which is based in San Francisco and is another Uber competitor, is also involved in the “global alliance” discussions, Buzzfeed reported. Neither Lerer nor SoftBank appear to have investments in that company.