Online cab-hailing company Uber and Russian search engine major Yandex have agreed to merge their taxi-hailing businesses in Russia, Azerbaijan, Belarus, Kazakhstan, Armenia, and Georgia. The agreement will also include the food delivery business UberEATS. Uber will invest $225 million into the merged entity for a 36.6% stake. On the other hand, Yandex will invest $100 million for a majority 59.3% stake. The remaining 4.1% stake will be held by employees of the merged entity on an FD basis.
The new company will initially operate in 127 cities across these six countries, and serve over 35 million trips per month. Currently, Uber operates in 16 cities in Russia and 5 cities in Azerbaijan, Belarus and Kazakhstan, with no operations in Armenia and Georgia.
The deal is subject to regulatory approvals and is expected to close in Q4 of this year. The Uber app and Yandex Taxi will continue to operate independently for the time being, while the driver apps will be integrated after the deal closes. Yandex Taxi’s Tigran Khudaverdyan will become the CEO of the merged entity.
Uber launched operations in Russia in 2014, and in these three years has invested around $170 million. Head of Uber’s business in Europe, the Middle East and Africa, Pierre-Dimitri Gore-Coty said:
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 car ownership across the region.
It’s worth noting that just a couple of months earlier, Rutaxi and Fasten – Uber and Yandex’s main competitors in Russia – had also merged their businesses.
Uber’s China exit: In August last year, Chinese ride-hailing major Didi Chuxing acquired Uber’s China operations. Following the deal, Uber and its investors had a 17.7% stake left in the China operations.
Uber continues to invest in India operations
- In May this year, Uber had infused Rs 51.64 crore into its India operations.
- In June last year, when the company had raised $3.5 billion from the Saudi Arabian Public Investment Fund, it had said that the investment is part of the global fund and will be utilised in strategic markets like India.
- Prior to that, in July 2015, Uber had invested $1 billion into its India operations over a 6-9 months period.
- And a month later, in August 2015, Tata Opportunities Fund (TOF) invested an undisclosed amount in Uber to expand its services and solutions in India.
- Last year, between June and September, the company also invested an additional Rs 200 crore in Mumbai-based car leasing firm Xchange Leasing, after investing Rs 43 crore in it between January and March 2016. Uber had partnered with the company to lease cars out to drivers, in December 2015.