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SoftBank invests in Uber to take on Google

Stake in ride-hailing app will be key in company's quest for data

Uber Technologies' experimental driverless car guides itself over the streets of San Francisco.

SILICON VALLEY -- SoftBank Group, along with its partners, has all but secured a large stake in U.S. ride-hailing giant Uber Technologies, completing a portfolio spanning all aspects of autonomous driving -- from chips to vehicles to communications infrastructure.

Uber is also developing its own autonomous vehicles, along with automakers.

There's a reason behind SoftBank's comprehensiveness: The company intends to control a big share of the new urban transport market -- and all the data that comes along with it.

Essentially, SoftBank wants to be the next Google, which has long been in the data-amassing business.

Take the Japanese company's $164 million investment in U.S. startup Mapbox, which came in 2017. The deal shows how SoftBank intends to invest in urban transport services over the long term.

In July, Mapbox CEO Eric Gundersen visited Japan to discuss SoftBank's investment. He and SoftBank CEO Masayoshi Son brainstormed on the future of urban planning, such as a 5G next-generation high-speed communications network and a navigation system that uses augmented reality technology. The conversation was especially passionate when it came to the technologies that will underpin ride-sharing services with autonomous vehicles.

Son is trying to drastically redesign urban transport infrastructure, Gundersen said.

Mapbox's service is like a conduit for transport data in the age of autonomous driving, Gundersen explained. Some 300 million people around the world use the service, which more than 900,000 engineers worked on. Mapbox integrates various kinds of map information. Companies like Tesla and Uber are beginning to use the service.

Tesla has adopted a navigation service by Mapbox, a company in which SoftBank is to acquire a big stake.

Traffic information from Tesla, Uber and other vehicles is anonymized and instantly updated on the map screen. Many hope Mapbox will lead the effort to create a next-generation database of traffic maps that can share detailed information, down to what lanes cars are in.

SoftBank is not forcing its investee companies to use one another's services, but according to Gundersen, it intends to encourage data sharing as far as doing so helps group companies enhance their services and capture shares of the markets SoftBank is focusing on.

Uber buys basic map data from the Netherlands's TomTom and keeps to itself types of data it does not want rivals to have access to, such as estimated time of arrival at destinations. But it has started to openly share its map information with other companies through Mapbox.

As vehicles increasingly get networked and instantly share traffic information with each other, the importance of information infrastructure is growing in importance. For this, SoftBank has Sprint in the U.S.

However, Sprint's infrastructure and funding capacity appear weak compared to rival AT&T, which has continued to invest in enhancing its communication infrastructure.

Still, SoftBank has taken a step it should have: the acquisition of a stake in OneWeb, a U.S. startup weaving a constellation of satellites to enable global broadband access. The ability of OneWeb's network to cover remote locations can significantly enhance the cost-efficiency of SoftBank's 5G investment, which could otherwise be painfully expensive.

OneWeb plans to start launching satellites in the summer. It is looking at 2019 to complete a constellation of 900 or so satellites in low orbit. Founder and Chairman Greg Wyler has said OneWeb can cut costs by taking advantage of the manufacturing and silicon chip expertise held by its industrial investors, including European aerospace company Airbus and U.S. semiconductor maker Qualcomm.

And the OneWeb system is becoming more cost efficient as launching rockets comes down in price, especially with the emergence of U.S. space developer SpaceX.

SoftBank's investee companies are loosely connected in a way which can help the urban transportation infrastructure that the mother company envisions come true. This will inevitably throw SoftBank into competition with Google, which has expanded the scope of its own investments under a similar vision.

Lyft, the biggest rival of Uber based in the U.S., is a good example. It uses Google's map infrastructure. It has also received $1 billion from a Google-affiliated venture capital firm. It is codeveloping a self-driving car with Waymo, yet another Google affiliate. It invests in SpaceX, which plans a service that will compete with OneWeb's.

SoftBank's vision will also make its group companies a presence that automakers cannot ignore. Right now, automakers may be gauging how they should approach the SoftBank cluster -- which is similar to how they regard Google.

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