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Uber Cedes Russia to Yandex with $3.7B Merger Agreement

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Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#21

Post by oscii »

calafrax wrote: post #17
adventured wrote: post #11

Earlier quoted context omitted.

It's a moot issue. There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. Uber is fortunate if they come away from Russia with anything. In most industries Putin is reluctant to allow even his own oligarchs outright control. The notion he'd allow Uber to own their taxi / ride-hailing business is laughable (even assuming Uber could compete…

> Uber is fortunate if they come away from Russia with anything "Uber will invest $225 million and take a 36.6 percent stake ... Yandex will invest $100 million and own 59.3 percent" If they are paying twice as much as their partner for a minority stake I am pretty sure they will not be coming away with anything.

From the article:

> In Russia, Yandex.Taxi has gross bookings of $1.01 billion on an annualized basis, while Uber had $566 million, according to a presentation prepared for investors.

Two companies will be merged (in Russia), but the brands will stay. The investment-stake asymmetry is probably due to the difference in the gross bookings.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#22

Post by thriftwy »

superlopuh wrote: post #7

I have a feeling that they had not anticipated the level of the competition in Russia, where the cabs were such unbelievable scams that the locals had launched mobile-first services long before Uber entered the market.

I think you're oversimplifying Russian Taxi market a great deal.

First of all, you're saying that mobile-first services were launched because cabs were crap. The market was good because the market was bad?

Medium-size cities had very cheap fixed-rate taxi-by-telephone services. Like, whole city flat rate for $3 in driver's own old beater.

Meanwhile Moscow had awful taxi services (very unreliable and expensive) and you had better luck just lifting your hand when near the road (yes, that's how it actually worked).

Then Yandex launched their Taxi and reliability of service rose very fast while prices fell. Then, GetTaxi and Uber also entered market, as well as some smaller players like Maxim and Saturn. Yandex is still heavily focused on Moscow with unreliable coverage everywhere.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#24

Post by gtrubetskoy »

adventured wrote: post #11
superlopuh wrote: post #7

I have a feeling that they had not anticipated the level of the competition in Russia, where the cabs were such unbelievable scams that the locals had launched mobile-first services long before Uber entered the market.

It's a moot issue. There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. Uber is fortunate if they come away from Russia with anything. In most industries Putin is reluctant to allow even his own oligarchs outright control. The notion he'd allow Uber to own their taxi / ride-hailing business is laughable (even assuming Uber could compete…

> There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term.

You're probably right, and I wouldn't be surprised at all if the government passed a law enforcing that some day.

But - in this particular case, I have to say that Uber had nothing on Yandex, who has been in the Russian maps and taxi business far longer and their navigation app is absolutely top notch (you should see how it lays out the route, and the funny jokes the navigation voice cracks when you're stuck in traffic), as well as their taxi app. Yandex is a very clever company and infrastructure questions aside, they are hard to compete with.

In fact, I'd argue that Yandex's technology is better in some respects than Uber or Apple's and Google's (if we're talking maps) but you will not see Yandex taxi service in the USA for the exact same reason you've stated, in the US it will be a US company.

BTW, Google is only #2 search engine in Russia as far as I know, simply because Yandex is better. I often find myself checking ya.ru when searching for Russian words when Google comes up empty.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#25

Post by skinnymuch »

calafrax wrote: post #17
adventured wrote: post #11

Earlier quoted context omitted.

It's a moot issue. There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. Uber is fortunate if they come away from Russia with anything. In most industries Putin is reluctant to allow even his own oligarchs outright control. The notion he'd allow Uber to own their taxi / ride-hailing business is laughable (even assuming Uber could compete…

> Uber is fortunate if they come away from Russia with anything "Uber will invest $225 million and take a 36.6 percent stake ... Yandex will invest $100 million and own 59.3 percent" If they are paying twice as much as their partner for a minority stake I am pretty sure they will not be coming away with anything.

The overall company is worth $3B though, right? Seems like a good deal for Uber since they do half the revenue of Yandex. Uber was never going to be allowed to win Russia and they can lower the money they were pouring into Russia, sans this one time $225M. Probably save more from however much they were hemorraging. Just like with the Chinese merger, I think this is a good thing. Gets Uber to stop burning so much money.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#26

Post by bad_user »

reactima wrote: post #4

Uber got very dominant in market share in Moscow with all its subsidized rides. I paid 200USD for 30 rides! This is not sustainable...

I'm from Bucharest, Romania. The average price here is something like $0.35 / Km and the price I'm paying for a ride is somewhere between $2.5 and $5.

And that's the price of Uber as well, which can go up in rush hour, but we now have Taxify as well, which I prefer because their prices are more predictable.

So when you're saying that you paid $200 for 30 rides, that seems expensive to me.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#28

Post by JumpCrisscross »

Tinyyy wrote: post #27

Can anyone tell me what would happen to Uber's stake in the joint company if Uber fails? Is it auctioned off to cover its debts?

If by "fails" you mean goes into liquidation then, essentially, yes. Uber's JV stakes, like its other assets, would be used to make creditors while (under the supervision of a bankruptcy judge).

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#29

Post by COMMENT___ »

gtrubetskoy wrote: post #24
adventured wrote: post #11

Earlier quoted context omitted.

It's a moot issue. There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. Uber is fortunate if they come away from Russia with anything. In most industries Putin is reluctant to allow even his own oligarchs outright control. The notion he'd allow Uber to own their taxi / ride-hailing business is laughable (even assuming Uber could compete…

> There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. You're probably right, and I wouldn't be surprised at all if the government passed a law enforcing that some day. But - in this particular case, I have to say that Uber had nothing on Yandex, who has been in the Russian maps and taxi business far longer and their navigation app is ab…

> ... funny jokes the navigation voice cracks when you're stuck in traffic

I guess that we've been using different products.

You can use public pins on the map to communicate with other drivers and sometimes it's entertaining to read them. However, in my case the navigator's voice did never joke or tell anything it should not tell. Navigation is not a toy.

Re: Uber Cedes Russia to Yandex with $3.7B Merger Agreement

#30

Post by [deleted] »

gtrubetskoy wrote: post #24
adventured wrote: post #11

Earlier quoted context omitted.

It's a moot issue. There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. Uber is fortunate if they come away from Russia with anything. In most industries Putin is reluctant to allow even his own oligarchs outright control. The notion he'd allow Uber to own their taxi / ride-hailing business is laughable (even assuming Uber could compete…

> There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. You're probably right, and I wouldn't be surprised at all if the government passed a law enforcing that some day. But - in this particular case, I have to say that Uber had nothing on Yandex, who has been in the Russian maps and taxi business far longer and their navigation app is ab…

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