Uber merges with Russia's Yandex in 6 countries

Uber is ceding control of its operations in Russia by agreeing to merge its ridesharing business in the country and five other ex-Soviet republics with Yandex, the Russian search-engine leader that also runs a popular taxi-booking app., statement released by Yandex on Thursday July 13, 2017 said.   | Photo Credit: AP

Uber on Thursday announced that it was merging in Russia and five other ex-Soviet states with the taxi hailing app of the country's leading internet giant, Yandex.

"Uber and Yandex have entered into an agreement to form a new company," the head of Uber's operations in Europe, the Middle East and Africa, Pierre-Dimitri Gore-Coty, said in a statement, calling it "an exciting opportunity in a unique situation."

The merger applies to ex-Soviet Russia, Azerbaijan, Belarus and Kazakhstan, and will also cover Armenia and Georgia, where Uber does not currently operate — in total covering 127 cities, he said.

The move follows the sale by Uber of its China business in 2016 following a ferocious battle for market share.

The company's chief executive Travis Kalanick resigned in June under pressure from



investors over a corporate culture rife with bullying and sexism.

Uber launched in Russia three and a half years ago. Yandex started its taxi app in 2011 and controlled more than half of the market in 2016.

Yandex Taxi's general director Tigran Khudaverdyan said in a statement that the joint venture would provide 35 million taxi journeys per month. He said the aim was to "create a platform that will be comparable in terms of comfort and accessibility with having your own car."

Yandex said the joint company was worth $3.725 billion and added that it was investing $100 million into the venture, with a 59.3% stake.

Uber said its investment is $225 million dollars and its 36.6% stake will be worth almost $1.4 billion. The remaining stake will be held by employees.

The companies said that passengers could continue to use the separate apps, while drivers will work using a single platform. The combined venture will also include Uber's EATS online meal delivery business.

The third major player in the Russian marketplace is Gett, launched in Israel in 2011, which covers more than 70 Russian cities.