Uber Cedes Russia to Yandex with $3.7B Merger Agreement
bloomberg.com
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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.
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.
I talked to Moscow taxi drivers on more than one occassion and they were dismissive of Uber as an older and inferior iteration of what Yandex.Taxi was doing. Uber was never at the top, but at a fairly distant second, so their minority-shareholder "merge" with YT is of no surprise.
Gross bookings approximately half that of Yandex and more cities than Yandex doesn't sound like a fairly distant second especially since Uber arrived well after Yandex. Uber was doing better against Yandex than Lyft is doing against Uber. Approximately a 40% stake in the new venture and 3 of the 7 board seats appears to be a testament to Uber's relative strength against Yandex.
I think that's not quite true. The industry (oil, car manufacturing, software, etc.) is pretty much dependent on the Western products and tech.
Besides Uber, GetTaxi is quite popular in Russia. And there are more local similar taxi services besides Yandex, but they are less known. In general, Uber and Yandex are the most popular at the moment.
There is a big difference between being dependent on Western products and tech and owning/operating those Western products and tech. I guess the risk of backdoors is still there, but if you own and operate everything, you can implement security that mitigates these risks, and the alternative of not having access to the tech at all is untenable.
The real privacy and national security concerns with ridesharing are on the demand side, and AFAICT this deal lets both companies retain control of their demand side. Ultimately, this deal allows Yandex control over the information of Yandex customers and Uber control over Uber customers.
"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.
So this entity racks up a lot of debt (to Yandex) while making transfer payments to Yandex and then in a few years: "whoops, bankrupt!"
Now the equity holders (Uber) get wiped out and the company re-organizes and sells its assets (to Yandex) to pay off its debts (to Yandex) and Uber gets nothing.
Oh, NO! That's not legal! That's not fair! Good luck in Russian court buddy.
They are losing everything. They are burning another $225M to forestal the inevitable and pretend like it is not a complete loss but it is only a matter of time.
If Yandex can take Uber's stake, which is worth billions as you say, they would be stupid not to, and they can, so they will.
> 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.
Travis didn't just want to dominate the industry, he wanted to dominate the world: a megalomania to a whole new level.
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.
I think that the rating system helps at least partially to fix this exploit (if it actually is an exploit and not a fantasy).
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.
Uber does not really do anything special to ensure this professionalism in Russia except a brief screening, AFAIK.
That's why I don't think that anything will change from rider's perspective.