Russian Tech Giant Yandex Merges Taxi Service with Uber
- Author: Douglas Reid Jul 14, 2017,
Jul 14, 2017, 0:14
As I just discussed with the local team in Moscow, Uber and Yandex have entered into an agreement to form a new company which combines our Rides and EATS businesses in Russia, Azerbaijan, Belarus and Kazakhstan, as well as Armenia and Georgia where we now do not operate. The countries include Russia, Azerbaijan, Belarus and Kazakhstan, as well as Armenia and Georgia, where Uber now does not operate. The two companies are forming a yet-to-be-named joint operation that Yandex will own the majority of with 59.3 percent control. It is agreed upon that Uber will invest $225 million while Yandex will invest $100 million of its own money. Tigran Khudaverdyan, now the CEO of Yandex.Taxi, will become the CEO of the combined business.
Emil Michael, Uber's former SVP of Business who left the company last month, was also involved in the deal.
"This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business". It is about twice the size of Uber's, according to data released to investors Thursday.
Tigran Khudaverdyan, head of Yandex.Taxi in Russian Federation, will become CEO of the merger.
While Uber no longer exists in China, the paper value of its stake in Didi has risen to around $8 billion from $6.1 billion, based on Didi's recent funding round valued at $50 billion. It's a roaming deal similar to what USA ride-hail rival Lyft attempted with China's Didi and other regional competitors.
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Following the merger, the driver apps will be merged, but customers will be able to use either Uber or Yandex.Taxi to hail either company's cars in countries where one is predominant. Yandex will be the leading partner in the merger, with the merged companies to operate together in 127 cities across six nations, including Russia, Armenia, and Georgia, according to Reuters.
After a long battle, Uber sold its subsidiary to the China-based Didi Chuxing and formed another new entity that operates in that region.
The new company will also operate the UberEATS service in the region. Driver apps will be integrated after the transaction closes.
Given changes in the business at home - namely CEO Travis Kalanick resigning amid a host of scandals involving sexual harassment and other bad management practices - the company appears to be having a wider thinking of its overall strategy.