Uber links up with Russian ‘Google’ for ride-sharing
UBER and Yandex, the “Google of Russia”, have agreed to combine their Russian ride-sharing businesses, with Yandex becoming the leading partner in a deal that extends to five neighbouring markets.
The agreement sent Yandex shares rocketing 17 percent in afternoon Moscow trade yesterday and follows the merger in May of rival Russian taxi players Fasten and Rutaxi.
“With this deal Yandex eliminates an aggressive competitor which, in the long run, will lead to improved monetisation and profitability,” said Sergey Libin, an analyst with Raiffeisen Bank in Moscow. “It’s a good deal.”
The deal marks another pullback from Uber’s breakneck global expansion, coming a year after its exit from China. It does have potential upside for the Silicon Valley online taxi hailing pioneer, based on its 36.6 percent stake in the merged company. San Francisco-based Uber has agreed to invest $225 million (R3 billion) while Yandex will contribute $100m into a new joint company in which Yandex will own 59.3 percent and employees have a 4.1 percent stake.
For months Uber has struggled with legal setbacks, accusations of a sexist work culture and driver protests, culminating in the June departure of co-founder and chief executive Travis Kalanick under investor pressure.