Online taxi service Uber is ceding its ride-hailing business in Russia and ex-Soviet markets by merging with local rival Yandex. It is Uber’s second retreat from a major market after quitting China last year.
Uber will invest US$225 million, while Yandex will invest US$100 million in the joint venture, the companies said. The merged company will operate in Russia, as well as in Azerbaijan, Armenia, Belarus, Georgia, and Kazakhstan.
The Uber business in Ukraine is not part of the deal, a representative of Uber stressed.
Both mobile applications will still be available; 59.3% of the company will belong to Yandex, 36.6% to Uber, and 4.1% to the employees of the new business.
Tigran Khudaverdyan, head of Yandex.Taxi in Russia will become CEO of the joint enterprise. Together, the two firms handle 35 million rides a month.
The new company, which has not yet been officially named, “will have the right to use Yandex. Taxi and Uber brands in the region,” the companies said.
In Russia, Yandex.Taxi has about US$1 billion in gross bookings per year, while Uber had US$566 million. The merger ends the two companies’ four-year battle for the Russian market. Price undercutting in Russia has led to some of the cheapest fares in Europe with rides starting from only 99 rubles (US$1.65).
Worldwide, Uber lost US$708 million in the first quarter of 2017, before interest, taxes and stock-based compensation, compared to US$991 million in Q4 of 2016.
Full Content: Bloomberg