Uber merges its eastern European arm with Russian rival Yandex

by Fredrick Graves July 14, 2017, 0:13
Uber merges its eastern European arm with Russian rival Yandex

He said Uber is investing $225 million cash in the new company and its 36.6% ownership stake will be worth nearly $1.4 billion; the San Francisco-based company will fill three of the seven seats on the new company's board. Yandex's stake will be ~59.3%, Uber's 36.6% and employees 4.1%.

The deal marks another retreat for the San Francisco, California-based company following its withdrawal from China in August past year, when it folded its Chinese interests in with indigenous rival Didi Chuxing. While Uber remains the dominant ride-hailing operator in the USA, it has been on the defensive, beset by scandals that led to Travis Kalanick's ouster as chief executive officer.

FAS press service told TASS earlier Yandex and Uber did not yet submit application to the Russian Federal Antimonopoly Service.

A Yandex.Taxi. Yandex and Uber will combine their ride-hailing services into a new company. The deal is expected to close in the last three months of 2017.

These two moves highlight how Uber's once-global ambitions have been pared back as it has encountered challenges in dominating foreign markets in the same way it has succeeded in the U.S. They were key deal-makers for Uber.

Uber entered Russian Federation with a launch in Moscow three-and-a-half years ago.

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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.

Uber announced today that they'd be taking a step up in the world by buying up a bunch of Russia's Google - Yandex.

"Not only is this partnership good news for our two companies, it's also great for riders, drivers and cities across the region". The UberEATS food delivery service is also included in the deal.

"Many of us who work inside Yandex feel that everyone has already switched to ride-sharing, but in reality, we are just at the beginning of this journey", Khudaverdyan wrote in a blog post.

Yandex began operating Yandex.Taxi in the region in 2011, and has connected "tens of millions of riders and drivers", according to a statement from chief exec Tigran Khudaverdyan.

That means Yandex.Taxi users will be able to hail an Uber in places like India and the USA using the Yandex app. Uber users will also be able to hail a Yandex.Taxi using the Uber app in places Yandex is available.

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