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Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

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Illustration: Shoshana Gordon/Axios

Uber has amassed a collection of stakes in other transportation and related companies, such as its piece of newly public Chinese ride-hailing giant Didi.

Why it matters: These investments once were viewed as consolation prizes but now are worth more than $13 billion.

Flashback: After plowing $2 billion into its Chinese operations, Uber sold its China business in 2016 for an 18% stake in Didi (it's now about 12%).

  • The timing was important, a source close to the deal tells Axios. Uber had just raised $3.5 billion from Saudi Arabia’s sovereign wealth fund in May, and executives felt the company was in its strongest position to negotiate a favorable deal as it had showed it could easily raise large bags of cash to keep competing.
  • This gave Uber a template when it considered its operations in Russia, which it eventually sold to rival Yandex.

Uber has continued to make these sorts of deals since CEO Dara Khosrowshahi took over in 2017.

  • While selling Uber’s autonomous driving unit was unthinkable under former CEO Travis Kalanick, the company recently shed it in exchange for a sizable stake in Aurora Innovation. In turn, Aurora is now in the process of going public via a SPAC.
  • Uber did the same with its “flying taxi” unit.

Between the lines: The pandemic’s pressure on Uber to focus on its core businesses, coupled with the reality that self-driving cars will take much longer than predicted, made selling units focused on autonomous driving and bikes the smart move, says D.A. Davidson managing director Tom White.

  • And unlike Yahoo's valuable stake in Alibaba, which largely propped up Yahoo's valuation as its core business decayed, Uber's ride-hailing and delivery businesses are very much alive and kicking.
  • Still, White cautions that even though some of these companies are going public, Uber’s stakes aren’t cash and aren't as liquid as they seem since they can't be easily offloaded without affecting the price.
  • And the newly announced probe into Didi's cybersecurity operations by Chinese regulators could turn into a serious problem (it's already put a damper on its stock price).

The bottom line: "While some of these investments are strategic and Uber will remain involved for the foreseeable future, others are likely to be significant sources of liquidity,” Uber CFO Nelson Chai said on a Q1 earnings call with analysts.

Go deeper

China's homegrown techlash

Illustration: Annelise Capossela/Axios

With the Chinese government accelerating moves against its own tech industry, China is — for now — prioritizing Communist Party control of the domestic economy over aggressive international competition.

Why it matters: China and the U.S. are both playing a long game, with tech as the playing field, companies as the pieces and domination of the global economy as the stakes.

California governor declares drought emergency for entire state

California Gov. Gavin Newsom speakinng to reporters in Los Angeles in September. Photo: Allen J. Schaben/Los Angeles Times via Getty Images

California Gov. Gavin Newsom (D) extended a drought emergency declaration to cover the entire state on Tuesday.

Why it matters: "California is experiencing its worst drought since the late 1800s, as measured by both lack of precipitation and high temperatures," per a statement from the governor's office. This past August was the driest and hottest one on record, "and the water year that ended last month was the second driest on record," the statement added.

Updated 2 hours ago - World

Reports: Brazil leader to be accused of crimes against humanity over COVID

Brazilian President Jair Bolsonaro. Photo: Andressa Anholete/Bloomberg via Getty Images

A Brazilian Senate panel will recommend President Jair Bolsonaro be charged with "crimes against humanity," alleging his COVID-19 pandemic response led to hundreds of thousands of deaths, per the New York Times and the Washington Post.

The latest: The lawmakers initially said Bolsonaro should be charged with mass homicide and genocide, but lawmakers updated the report to replace these recommendations with the new charge, its lead author, Sen. Renan Calheiros, told the NYT.