SoftBank’s Masayoshi Son bets on ride-hailing industry, despite scepticism

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Analysts believe the Japanese tycoon, who has huge stakes in the industry, will multiply his stock after further automation

SoftBank Group CEO Masayoshi Son attends a news conference in Tokyo, Japan, on November 5 2018. File photo: REUTERS/KIM KYUNG-HOON

SoftBank’s stakes in Uber, China’s Didi Chuxing, Southeast Asia’s Grab and India’s Ola are worth between $22.1bn and $26.5bn, according to Chris Lane, an analyst at Sanford C Bernstein & Co. The calculation is part of a 27-page report issued on Wednesday and is based on the price-to-sales valuations of Uber and rival Lyft.

A shift from the current driver-for-hire model to fully-autonomous vehicles could quadruple the industry’s revenues, while cutting costs in half and pushing up the value of the ride-hailing portfolio to between $240bn and $430bn by 2030, Lane projects. That implies an annualised return between 24% and 30% over the next 12 years. The estimates don’t include SoftBank’s stake in Cruise and the reported investment in Uber’s own autonomous unit.

At an earnings briefing in February, Son indicated that ride-hailing is a long-haul bet. He showed a black-and-white photo of New York’s Fifth Avenue in 1900, thronged with horse-drawn carriages. Another photo of the same street 13 years later was full of Henry Ford’s Model Ts.

 

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