Yandex.Taxi and Uber have closed a deal to combine services. Yandex merged with Uber: what will happen to prices What will change after the merger of Uber with Yandex

Yandex.Taxi and Uber announced the closing of a business combination deal in Russia and several CIS countries. Compared to previously announced plans, the valuation of the new company has increased by more than $75 million.

Photo: Natalya Seliverstova / RIA Novosti

As stated in a message from Yandex received by RBC, Yandex.Taxi and Uber have closed a deal to merge the companies’ businesses in Russia, Azerbaijan, Armenia, Belarus, Georgia and Kazakhstan.

In the merged company, Yandex received 59.3% of the shares, Uber - 36.9%, and employees of the new structure - 3.8%. Uber invested $225 million in the new company, Yandex — $100 million.

Tigran Khudaverdyan, who previously headed Yandex.Taxi, became the general director of the new company. The board of directors included four representatives from Yandex and three from Uber.

The companies agreed to merge business in several CIS countries in July 2017. Initially, it was assumed that the distribution of shares in the company would be slightly different: 59.3% of the new structure would belong to Yandex, 36.6% to Uber, 4.1% to its employees. It was assumed that as a result of the transaction, Yandex would receive a small stake in Uber's global business. At the end of November 2017, the deal was concluded by the Federal Antimonopoly Service.

Initially, the value of the combined company was estimated at $3.725 billion. The Yandex message indicated that this figure is now “estimated at more than $3.8 billion.” As a Yandex representative explained, the new estimate was formed “taking into account the cash that the merged company will be able to manage.” Upon completion of the transaction, its accounts will have more than $400 million.

As representatives of the companies previously explained, after the transaction, both of their applications will continue to exist. However, the merger should improve the quality of services of both companies. As their representatives explained, a single technological platform will be created for taxi companies and drivers, which should increase the number of cars available for fulfilling orders, reduce the delivery time, reduce idle mileage, and increase the reliability and availability of the service as a whole.

The combined company of Yandex.Taxi and Uber will be engaged not only in the transportation of passengers, but also in the delivery of food from restaurants - the UberEATS service was included in the deal. In addition, in December 2017, Yandex.Taxi closed a deal to purchase the food delivery service Foodfox. According to RBC, the purchase of Foodfox cost Yandex.Taxi approximately 500 million rubles.

According to the analytical center under the Russian government, the volume of the taxi market in Russia has increased by 14.2% annually over the past couple of years and at the end of 2017 amounted to 575 billion rubles. The authors of the study call the Vezet group of companies the largest market player with a share of 12.3% - it was created by combining taxi ordering services Fasten Russia (operating under the Saturn and RedTaxi brands) and Vezet (RuTaxi, Leader brands, "Lucky") The total share of Yandex.Taxi and Uber at the end of the year was 10.4% of the market, which means that their combined structure will take second place in the market. Following it is Maxim with 7.6% of the market, and then Gett with a share of 2.5%. In general, aggregators currently occupy only 32.8% of the taxi market in Russia; the remaining share falls on the traditional offline ordering market.

You have most likely already heard the news about the merger of Uber with Yandex.Taxi and are slightly perplexed: what does this mean? We explain everything in five simple questions and answers. Spoiler: nothing scary at all.

What happened?

Unexpectedly, Yandex.Taxi and Uber decided to combine their services in Belarus, Russia, Azerbaijan, Armenia, Georgia and Kazakhstan. The changes do not affect Ukraine - Uber remains itself here.

Uber and Yandex.Taxi will invest $225 million and $100 million, respectively, in the new company. The combined firm is estimated by carriers to be worth $3.725 billion. Taking into account these investments, 59.3% of the company will belong to Yandex, 36.6% to Uber, and 4.1% to employees. The company will be headed by the CEO of Yandex. Taxi" Tigran Khudaverdyan.

Why is all this needed?

As Tigran Khudaverdyan, CEO of Yandex.Taxi, explains, partnership with Uber will help quickly expand the geography of the business and improve the quality of service. The new company will use, on the one hand, Yandex’s technologies and knowledge in the field of mapping and navigation services. On the other hand, Uber’s global experience as the world leader among online taxi ordering services. Both carriers collectively provide more than 35 million trips per month, and this figure will only continue to grow.

How can I call a taxi now?

Don't worry, you won't have to worry about this. Both applications will continue to work in all countries included in the agreement. Taxi drivers will be connected to a common system, and they will receive orders from both the Yandex.Taxi application and Uber. Moreover, this will also work abroad. that when you arrive in London or Bangkok, you can order an Uber from the Yandex.Taxi application.

Will prices change?

Should not. Yandex claims that there will be no radical changes in tariffs. Uber also does not plan to change tariffs.

As before, the cost will be generated automatically and in real time. Carriers remind you that it depends not only on the tariff, but also on the balance between supply and demand at a specific point in time and for a specific point on the map. For example, in the rain and on Saturday evening the coefficient increases the price. There are no changes here.

I found out how all this would work and who would benefit from the merger of two market giants.

Under what conditions do they merge?

The parties have already disclosed the financial part of the issue. Uber will invest $225 million in the new company and receive 36.6 percent of the shares, Yandex - $100 million for 59.3 percent of the shares. estimated at $3.7 billion, it will operate in six countries and 127 cities, providing 35 million trips worth 7.9 billion rubles. Yandex will also develop the UberEATS food delivery business based on Yandex.Maps walking routes.

What was the market like before the merger?

According to Lenta.ru sources, in 2016, Yandex.Taxi drivers made more than 16 million trips per month, more than 500 thousand trips per day. The second company in the market, Uber, had 4.8 million trips monthly, or 160 thousand per day, and Gett, which closed the top three, had 4.3 million trips per month, or 143 thousand per day.

Photo: Evgeny Pavlenko / Kommersant

In the same year, experts from the analytical center estimated the total volume of the legal taxi market at 441 billion rubles, and illegal taxis at 116 billion rubles. According to their data, 338 thousand taxi drivers constantly work in Russia, and the number of issued licenses exceeds 457 thousand.

There are more than 47 thousand licenses in Moscow, and more than 105 thousand in the Moscow region. This is due to the fact that today licenses in the capital are issued only to yellow cars, and in the Moscow region the official color of taxis is white, that is, the car does not need to be repainted or covered with film.

Most cars belong to taxi companies, and Yandex.Taxi, Uber and Gett act as order aggregators, that is, a more advanced analogue of dispatch centers. They charge taxi companies a monthly fee to use their system and take 15-20 percent of each trip. The taxi companies themselves make money by renting out cars, receiving up to 2 thousand rubles from taxi drivers every day.

The average income of a taxi driver in Moscow is 7.3 thousand rubles per day, in St. Petersburg - 6 thousand rubles, in cities with a population of over a million - 3.5 thousand rubles. Most drivers are registered as individual entrepreneurs and are not officially on the staff of the taxi companies from which they rent cars.

What changes await drivers?

Uber and Yandex.Taxi will combine driver databases, and they will also use Yandex maps and order distribution algorithms. In theory, it will be easier for taxi drivers to navigate the city, since the Yandex navigator is objectively better than the service used in the Uber application. The combined base (again in theory) will increase the number of available cars, which will reduce the delivery time and reduce the cost of trips.

However, the taxi drivers themselves are not very happy about this. Yandex.Taxi driver Said told Lenta.ru that the abundance of free cars will increase competition, but will reduce the workload of drivers. This means the number of trips will decrease. “This is all, of course, very cool, but I pay 1,850 rubles per day for a rented Ford Focus. And also gasoline - the car “eats” 10 liters per 100 kilometers, that’s 370-400 rubles. Plus a commission of 800 rubles - formally it is paid by the taxi company, but in fact I pay it. The average order I have now is 300 rubles, I make about 15 such orders. So calculate how much I earn,” he complains.

Photo: Anton Belitsky / Kommersant

Uber driver Alexey agrees with him. “You can’t work without a license now, plus soon we will be completely bent on color, in Moscow all cars must be yellow, and it costs 30-40 thousand to cover with film, even from someone we know. Yes, now we will fight for every order, passengers will probably like it. But we will definitely be able to raise less money, and migrants will squeeze us out. They are ready to work 20 hours on speed [amphetamines], but we are not. Although you have to, no matter where you go,” he says.

Alexey also noted that drivers will probably start working as private drivers more often. “You enter the night and stand at points where there are a lot of people. It is often possible to negotiate for cash. And in the morning you start accepting orders from Uber. True, for this you must have your own car, the taxi company will quickly notice that you are driving around for days, and will not allow you to go on a regular trip,” the taxi driver sums up.

Will passengers like the changes?

In theory, combining driver databases and unified navigation from Yandex will increase the speed of delivery of cars and allow taxi drivers to better navigate cities. “This is very important, because 80 percent of drivers come from the CIS,” explains Lenta.ru’s source in one of the taxi services.

On the other hand, the price war between Yandex.Taxi and Uber, which annoyed taxi drivers but was very popular with users, will end. Both companies constantly dumped and introduced new options: in February they set fixed prices, and in April, Yandex.Taxi supported Uber’s announced price reduction of 10-50 percent.

Photo: Alexander Koryakov / Kommersant

At the same time, in order to maintain income, both companies introduced so-called high-demand zones, where, depending on the time of day and the workload of drivers, the cost of the trip increased. True, this led to the fact that during peak hours tariffs soared by 200 percent, and in case of bad weather, a 15-minute route cost a nominal 800 rubles.

However, the merger of Yandex.Taxi and Uber is unlikely to reduce the cost of trips. On the contrary, the merged company will actually become a monopolist in the market, which means it will be able not only to dictate pricing policy, but also not to take into account the opinion of taxi drivers, who, due to the increased number of available drivers, will have no choice but to accept the new rules of the game.

This means that passengers will continue to be carried by taxi drivers who do not know the city, but who work 20 hours and receive pennies for it. Only the price for their services will most likely increase, because now the alliance of Yandex.Taxi and Uber need not be afraid that their orders will be picked up by drivers of a competing service.

Uber and Yandex announced the closing of a deal to merge taxi call services. As a result, the association will be managed by the head of Yandex.Taxi, Tigran Khudaverdyan. The board of directors of the resulting company is headed by three representatives from Uber and four from Yandex. The company announced this idea in advance - back in July 2017. The services have merged in Russia, Kazakhstan, Georgia, Azerbaijan, Armenia and Belarus.

Managers promise that travel prices will remain the same. As before, there will be two applications, but now they will have common drivers and taxi companies. Along with taxis, the joint company will also engage in food delivery. Yandex.Taxi has established a subsidiary company, Yandex.Eda, which will include the recently acquired Foodfox and UberEATS services.

We quote the official statement: “At the time of closing of the transaction, Uber and Yandex invested respectively 225 million and 100 million US dollars in the new company. With these investments, the company has $400 million in cash on its balance sheet. Thus, it is valued at more than US$3.8 billion. About 59.3% of the company is owned by Yandex, 36.9% by Uber, and 3.8% by employees."

Uber and responsibility

It is also curious that Uber sent letters to all customers by email about changes in the provision of their services, in which, in fact, it abdicated all responsibility for carriers. “You acknowledge that Uber does not provide transportation or logistics services or operate as a transportation company and that such services are provided by third parties.<…>Uber does not guarantee the quality, suitability, safety or capabilities of third party providers. You agree to bear all risks associated with the use of the services solely and to the maximum extent permitted by law. The Company shall not be liable for indirect, incidental, incidental, special, punitive or consequential damages, including lost profits, lost data, personal injury or property damage, in connection with the services, even if the Company has been advised of the possibility of such damages.”

07/13/2017, Thu, 13:32, Moscow time , Text: Igor Korolev

Yandex has agreed to merge its taxi service with Uber. The merged company will be under the control of Yandex, and $325 million will be invested in it.

Yandex creates a joint venture with Uber

The Yandex company has agreed to merge the Yandex.Taxi service with Uber. The partnership will work in Russia, as well as in Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan.

Uber will invest $225 million in the merged company, Yandex - $100 million. Control in the new structure will belong to Yandex - it will have 59.3%. Uber will own 36.6% of the shares. Another 4.1% will belong to the company's employees.

What will the merged company be like?

The combined company will be headed by the CEO of Yandex.Taxi Tigran Khudaverdyan. According to the press release, the new company will use Yandex's technology and knowledge in the field of mapping and navigation services and search engines and Uber's global experience as the world leader among online services for ordering transportation.

This will create an even more dynamic and sustainable business that meets all the needs of users and drivers, and also helps develop the transport infrastructure of cities and regions.

In the combined taxi of Yandex and Uber, Yandex will receive a controlling stake

After the deal is closed, both ride ordering applications, Yandex.Taxi and Uber, will continue to be available to users. At the same time, taxi companies and drivers will switch to a single technology platform. As stated in the press release, this will increase the number of cars available for fulfilling orders, reduce the delivery time, reduce idle mileage, and increase the reliability and availability of the service as a whole.

The transaction is expected to be completed in the fourth quarter of 2017. As part of the agreement, Yandex.Taxi agreed on roaming with Uber. Now tourists from Russia will be able to call a taxi abroad using the Yandex.Taxi application, and tourists from abroad will have access to cars from Yandex.Taxi using the Uber application. UberEats, a food delivery service launched by Uber, will also be part of the partnership.

Chinese version

Interestingly, a year earlier, in August 2016, Uber made a move in China by allowing itself to be swallowed up by local taxi startup Didi Chuxing.

Didi Chuxing is the largest taxi service in China, headquartered in Beijing. According to Reuters, the service’s share of the taxi ordering market in China is 55%. Uber co-founder Travis Kalanick(Travis Kalanick) in 2016 estimated his company's share in the Chinese market at 30-35%.

The value of the combined venture between Uber and Didi Chuxing was expected to be about $35 billion. Uber China investors received a 20% stake in Didi. The Uber brand itself continued its presence in the Chinese market after the deal, and Didi Chuxing was supposed to invest $1 billion in the development of Uber in the United States.

Taxi market estimates

According to VTB Capital estimates, the market for legal taxi transportation in Russia in 2016 amounted to 501 billion rubles. At the same time, according to estimates from the Government Analytical Center, the market for “gray” taxis amounted to 116 billion rubles. Thus, the share of the combined company in terms of revenue in 2016 would have been 5-6% of the entire market.

Possible reasons for the merger

A source in the taxi market sees several reasons for the merger of Uber with Yandex.Taxi. “Essentially, Uber invented the bomb market for the European Union and the United States, but in Russia it existed for years. In addition, in Russia Uber has to deal with various problems: claims from the FAS and Roskomnadzor, requirements to work exclusively with licensed drivers, etc. For this reason, it was not easy for Uber to operate in Russia.”

Due to the news about the merger of taxi services Yandex and Uber, Yandex shares reached a historical high

In addition, partners need to join forces to promote in the regions. In Moscow, Yandex.Taxi is the leader in the number of trips, Gett is in second place, and Uber is in third place. At the same time, in the country as a whole, the leaders are the services Maxim, Vezet and Rutaxi, notes the CNews interlocutor.

The combined company will have access to combined capital, which will allow it to strengthen its marketing efforts and offer various digital services. But whether tariffs will be reduced is a question, because such a step will require support from the drivers themselves, adds the publication’s interlocutor. Yandex did not comment on the issue of changes in tariff policy.

Yandex shares reached a historical high

Immediately after the announcement of the creation of a joint company with Uber, Yandex shares began to rise in price.

By 14:00 Moscow time on July 13, 2017, their growth was 18%, and the price reached $27.72 on the Nasdaq exchange and 1.95 thousand rubles. on the Moscow Exchange, which, as Vesti.Ekonomika reports, became a historical maximum share price in the history of the company.

Towards evening, trading in Yandex shares on the Moscow Exchange was switched to a special regime due to an increase of more than 20%. Shares of Yandex N.V. on the Nasdaq exchange in New York increased by almost 16.5% compared to the previous reporting period and traded at $31.83 per share. At the same time, the growth in stock quotes reached 18.7%, TASS notes.