Uber forms a new company with its top competitor in Russian Federation

Uber forms a new company with its top competitor in Russian Federation

Uber forms a new company with its top competitor in Russian Federation

In a joint statement, they announced they would be conjoining their ride-sharing business, with the addition of Uber EATS food delivery, to operate in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan, totaling to 127 cities in a yet-to-be-announced company.

Ride-hailing company Uber is scaling back in Russian Federation by spinning off its operations in the country to form a new company majority-owned by local rival Yandex. Employees will own the rest. The CEO of Yandex Taxi, Tigran Khudaverdyan, will become the chief executive of the new combined company. The deal is still subject to regulatory approval and other conditions, and is expected to close in the last quarter of the year.

"This is an exciting opportunity in a unique situation and our operations in other countries will not be affected", Pierre-Dimitri Gore-Coty, the head of Uber in Europe, the Middle East and Africa, said in a blog post addressed to Uber employees. In 2016, the English-language Moscow Times reported on the three-way fight for business between Uber, Yandex.Taxi, and the Israeli company Gett. Along with its rides-on-demand business, the USA firm is also merging its food ordering and delivery business, UberEATS, with the Russian firm. Over the last three years we have invested around $170 million to build and expand our business to 21 cities in these countries.

The new company will also operate the UberEATS service in the region. The company also will stretch into Armenia and Georgia, where Uber does not now operate.

That means Yandex.Taxi users will be able to hail an Uber in places like India and the US using the Yandex app. Uber users will also be able to hail a Yandex.Taxi using the Uber app in places Yandex is available.

The deal heads off competition from Uber, which launched in Russian Federation in 2014. It's a roaming deal similar to what USA ride-hail rival Lyft attempted with China's Didi and other regional competitors.

After a long battle, Uber sold its subsidiary to the China-based Didi Chuxing and formed another new entity that operates in that region. Apps from both ride-hailing companies will continue to be offered, while the driver app will become a single platform. The name of the new company is yet to be confirmed. Once that happens, they plan to integrate their driver apps.

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