Uber combines with Russian ride-hailing service Yandex.Taxi
- Author: Toni Ryan Jul 14, 2017,
Jul 14, 2017, 0:16
The San Francisco-based ride-hailing service will merge with Yandex in six countries: Russia, Azerbaijan, Belarus, Kazakhstan, Armenia, and Georgia. Uber has agreed to invest $225m in the venture, but Yandex will retain a majority stake of 59.3 per cent, and has invested $100m of its own. The remaining 4.1% will go to employees.
But raising funds has never been a problem for Uber, as the company raised $3.5 Billion from Saudi Arabia's Public Investment Fund in June 2016, and another $1.5 billion in Debt from Morgan Stanley in July 2016.
Tigran Khudaverdyan, who heads Yandex.Taxi and will be boss of the new company, said the combination will boost rides for drivers and reduce wait times for passengers.
For Uber, the deal marks the exit from another big market after it sold its operations in China previous year to local rival Didi Chuxing.
"This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business", says Pierre-Dimitri Gore-Coty, Head of Uber in Europe, the Middle East and Africa.
Uber is also going to use its UberEATS food delivery scheme in NewCo.
For months, Uber has struggled with legal setbacks, accusations of a sexist work culture and driver protests, culminating in the June departure of co-founder and CEO Travis Kalanick under investor pressure.More news: Charges dropped against 2 youths in Tennessee wildfires
With Yandex's business, the new, as-yet-unnamed company will operate in 127 cities, compared to Uber's 21.
More than 35 million rides were performed in June between the two operations, collecting more than $130m in gross bookings.
Together, Uber and Yandex now book more than 35 million rides a month in the region. The company also will stretch into Armenia and Georgia, where Uber does not now operate.
"For example, a user of Yandex.Taxi could order an UberX directly from their Yandex.Taxi app upon arriving in London or Bangkok".
It's been noted many times before that Uber's strength is not just in terms of providing cheap rides but in how it has been building a large and powerful logistics business. Uber lost more than $2 million while fighting Didi in China. Once that happens, they plan to integrate their driver apps.
With the Yandex deal, Uber will also be appointing three board members for this new company.