Fri, Jul 14, 2017 - Page 10 News List

Uber forms joint-venture in Russia

The Guardian

Ride-hailing company Uber is scaling back in Russia by spinning off its operations in the country to form a new company majority-owned by local rival Yandex.

The deal involves Uber’s ride-hailing and food-delivery services in Russia, as well as Azerbaijan, Belarus and Kazakhstan folding into the new firm, along with Yandex’s own taxi app, which also operates in Armenia and Georgia. Both brands will continue to operate, but the driver-side apps will be merged into one, the company said

“The new company’s goal will be to serve the needs of riders, drivers and cities as we develop a fast-growing, sustainable ride-sharing, food delivery and logistics business in the region,” Uber Europe, Middle East and Africa head Pierre-Dimitri Gore-Coty said.

“Combining Yandex’s local expertise in search, maps and navigation with our leading global experience in ride-sharing will enable us to build the best local services and provide a credible alternative to car ownership across the region,” he said.

The new firm, will be 36.6% owned by Uber, which will have three of the seven board seats and is investing a further US$225 million in the spin-off. Yandex is to own 59.3 percent and employees 4.1 percent.

Its shares are to be worth almost US$1.4 billion, Gore-Coty said.

Yandex.Taxi chief executive Tigran Khudaverdyan, is to become the head of the new firm.

“Our users will have seamless global roaming across the Uber and Yandex.Taxi platforms,” Khudaverdyan said. “For example, a user of Yandex.Taxi could order an UberX directly from their Yandex.Taxi app upon arriving in London or Bangkok. An Uber user arriving in Moscow from Paris will be able to order a Yandex.Taxi straight from their Uber app.”

The deal has echoes of Uber’s previous moves in China, where the company sold its operations wholesale to native ride-sharing firm Didi Dache (滴滴打車) last year .

Unlike that deal, however, Uber will remain an active participant in its new investment and its Russian users will continue to use the same app as the rest of the world.

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