Just three and a half years ago, Uber officially launched in Moscow. It was the start of a journey that saw the company build a business that now spans across 16 cities in Russia and five cities in Azerbaijan, Belarus and Kazakhstan.
Now, Uber has announced that it is taking the next step in its mission to ensure everyone in these countries can get a reliable ride at the touch of a button.
Uber and Yandex, its rival in Russia, have entered into an agreement to form a new company which combines Uber’s Rides and EATS businesses in Russia, Azerbaijan, Belarus and Kazakhstan, as well as Armenia and Georgia where it currently does not operate.
The new company’s goal will be to serve the needs of riders, drivers and cities as it develops a fast-growing, sustainable ridesharing, food delivery and logistics business in the region. Combining Yandex’s local expertise in search, maps and navigation with Uber’s global experience in ridesharing, the partnership will enable Uber to build the best local services and provide a credible alternative to car ownership across the region.
For the foreseeable future, the Uber and Yandex brands and rider apps will continue to operate, while the driver apps will be integrated after the transaction closes. The transaction is subject to regulatory approvals and other conditions and is expected to close in Q4 of this year.
Over the last three years, Uber has invested around $170 million to build and expand its business to 21 cities in these countries.
“Combining our business with Yandex will give us a very significant stake in a new company which will initially serve more than 35 million trips each month and operate in an incredible 127 cities in six countries across the region. Uber will also have three of the seven seats on the new company’s board and—together with the $225 million cash investment we are making in the new company—our 36.6% ownership stake will be worth almost $1.4 billion,” said Uber in an email to its employees. “This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business.”
“Of course this success would not have been possible without our amazing team in the region and I am pleased to say that as part of today’s agreement all full time Uber employees in the countries involved will be part of the new company.”