Uber Merges Russian Operations With Yandex In Second Foreign Withdrawl

Yandex.Taxi have, until now, been one of Uber's main rivals in Russia.

Uber’s Russian operations will merge with its rival Yandex, whose Yandex.Taxi service operates in Russia and several former Soviet nations. The move is something of a surprise for Uber, a company noted for its aggressive tactics. Yandex will be the leading partner in the merger, with the merged companies to operate together in 127 cities across six nations, including Russia, Armenia, and Georgia, according to Reuters. Yandex will invest $100 million into the company for a 59.3 percent stake, while Uber is to hold 36.6 percent and invest $225 million. The remaining 4.1 percent will be held by employees. The position of CEO will be taken by current Yandex.Taxi chief executive Tigran Khudaverdyan.

As noted by the New York Times, the move is a rare one for the usually confrontational Uber, who has allegedly used aggressive business tactics against rivals such as Lyft. Indeed, the move could be seen as the company’s second retreat, following its Chinese arm being bought out by rival Didi in August of 2016. However, Uber is attempting to paint a far more positive picture of the merger, with Pierre-Dimitri Gore-Coty describing it in a blog post as “an exciting opportunity in a unique situation.” In a press release, Yandex.Taxi’s chief executive, Khudaverdyan, said the companies would work together on “building a ride-sharing service that offers a viable alternative to automobile ownership or public transportation.”

An Uber operating in Moscow on May 14, 2017.

Following the merger, the driver apps will be merged, but customers will be able to use either Uber or Yandex.Taxi to hail either company’s cars in countries where one is predominant. For example, Uber customers will be able to call Yandex cars through the app and vice versa. UberEATS will continue to operate in all six countries following the merger. According to the Financial Times, the battle for business has been weighing heavily on both companies. In the first quarter for 2017, Yandex.Taxi’s earnings were negative $20 million, with Uber losing $170 million over its four years in the nation. Due to Yandex’s status as the largest search engine in Russia, they also have a keen advantage in being able to use their own maps. This merger follows one in May between two other major Russian taxi companies Fasten and Rutaxi.

Yandex taxis in a row outside a building in Moscow, Russia.

The companies have been in competition for several years now, with Uber launching in Russia in 2013, while Yandex.Taxi launched in 2011. In 2016, the English-language Moscow Times reported on the three-way fight for business between Uber, Yandex.Taxi, and the Israeli company Gett. The American multinational had attempted to undercut their rivals, offering reduced fares to and from Moscow’s airports and in the resort city of Sochi. However, despite these offers, and reports from drivers of near-constant work, the Russian giant appears to have won out.

[Featured Image by Sergei Chuzavkov/AP Images]