Uber links up with Rus­sian ‘Google’ for ride-shar­ing

The Star Early Edition - - OPINION & ANALYSIS -

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.

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