Russia's Yandex Takes Lion's Share of Uber Deal

Representation pic

Representation pic

"Combining Yandex's local expertise in search, maps and navigation with our leading global experience in ridesharing will enable us to build the best local services and provide a credible alternative to auto ownership across the region", said Pierre-Dimitri Gore-Coty, head of Uber's business in Europe, the Middle East, and Africa, in a statement.

It's the latest following a series of price wars overseas. Yandex did not forecast any radical changes in tariffs now or in the future either.

Cameron Poetzscher, Uber's vice-president of corporate development, and Fraser Robinson, the head of business in the region, also played major roles in negotiating the deal with Yandex. According to Weiser, in the long run, "all drivers will have both applications".

"Yandex in the near term "is likely to keep subsidizing rides in order to grow its market penetration (the combined share of Y.Taxi and Uber was below 10% in 2016)". "This combined driver platform will significantly increase the number of available cars, reduce passenger wait time, and boost vehicle utilization".

"Combining our business with Yandex will give us a very significant stake in a new company which will initially serve more than 35 million trips each month and operate in an incredible 127 cities in six countries across the region", Gore-Coty said.

That marks a sizeable gain on the $170 million Uber invested since entering the region three-and-a-half years ago, even with the new $225 million investment. Meanwhile, Yandex will invest $100 million, but will own a 59.3 percent stake in still unnamed company.

Yandex does not rule out the initial public offering (IPO) for the new Yandex.Taxi and Uber and company, Yandex press service told TASS. Szpunar dismissed Uber's argument that it is only a technology company and said it should be regulated as a transport company, the Guardian reports.

The transaction is still subject to regulatory approvals and is scheduled to close in the Q4 2017.

A Yandex taxi is seen in central Kiev, Ukraine.

Yandex and Uber compete in Russian Federation with rivals including Fasten-owned Rutaxi and Saturn, Maxim and Gett, the Israeli startup backed by German automaker Volkswagen.

The JV is "a strategic positive" for Y.Taxi, Yandex's ride-sharing company, by preventing a costly market share battle, the analysts write. We have an idea - we have three main aggregators and if two of them are going to merge, then this is, of course, a threat to the market.

Russia's federal anti-monopoly regulator said the deal could pose risks to competition and a thorough analysis was needed before it could be approved, local news agencies reported.

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