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Uber Cedes Russia to Yandex with $3.7B Merger Agreement

109 points by OoTheNigerian 9y ago

baybal2 9y ago
Uber got itself into its own 'LeEco moment'
charlesdm 9y ago
If you can't beat em, join em.
reactima 9y ago
Uber got very dominant in market share in Moscow with all its subsidized rides. I paid 200USD for 30 rides! This is not sustainable...
- baybal2 9y ago
  You haven't seen their prices in T2 cities, it is like $1 per 5 to 6 kms. And they have the problem of "Uberists" - people who drive themselves around when Uber subsidizes rides. And they also have issue of botters who do the same, but at industrial scale (without actually driving themselves or anybody else of course)
  - martinald 9y ago
    So they have two phones, one for driver and one for customer, and they request rides and accept themselves? Clever.
    - COMMENT___ 9y ago
      How does the driver ensure that he will receive his own order? AFAIK, a driver can reject an order, but this action will badly affect his rating in Uber's system. I think that the rating system helps at least partially to fix this exploit (if it actually is an exploit and not a fantasy).
      - in_cahoots 9y ago
        If you don't receive your own order, have the passenger phone cancel the request and try again. I doubt the utilization is high enough that turning on the driver app immediately accepts a random request.
  - throwaway312338 9y ago
    Amusingly, that's comparable or slightly lower than what I'd have to pay for a Auto (tuk-tuk) ride here in India.
- lukasm 9y ago
  When I was in a small city outside Moscow I was paying $1.50 for a 1 min of a phone call and $1.40 for 10 mins cab ride. It was cheaper to take the cab and talk to someone than to make a call.
  - COMMENT___ 9y ago
    Did you call Alpha Centauri? Did you use Russian service provider?
- bad_user 9y ago
  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.
reactima 9y ago
Uber got very dominant in market share in Moscow with all its subsidized rides. I paid 200USD for 30 rides! This is not sustainable...
superlopuh 9y ago
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.
- adventured 9y ago
  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 well enough).
  - bwb 9y ago
    So true.
  - oscii 9y ago
    > There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. 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.
    - malandrew 9y ago
      > pretty much dependent on the Western products and tech. 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.
Spooky23 9y ago
Seems like a smart move to me. Given the political situation, operating at scale in Russia is a liability anyway. Now they get some cash and a stake in the Russian controlled operation.
amai 9y ago
Maybe relevant: http://englishrussia.com/2017/05/31/russian-airport-taxi-drivers-bought-gps-jammers-to-repel-uber-and-others/ http://englishrussia.com/2017/05/31/russian-airport-taxi-dri...
Grue3 9y ago
Damn. I used both and Uber is cheaper and much better customer service. Trying to get your money back from Yandex.Taxi is a kafkaesque nightmare.
- COMMENT___ 9y ago
  I don't get it. What money back? For non satisfactory service? Or for not providing the service you paid for?
  - Grue3 9y ago
    For example I had a case where a driver did not finish the ride when I got out of the car and did so 30 minutes later in some random location, and I got a huge bill. I also had a driver refuse me to drive me to the destination in the middle of a ride, I also refunded that. Not that Uber drivers don't do shit like this, but I found them more professional. Now that the two companies merged, it's gonna be the worst case scenario with monopoly-driven prices and shit drivers.
    - COMMENT___ 9y ago
      Oh, now I get it. However, aren't you forgetting that a lot of Uber drivers in Russia were or are still driving with Yandex Taxi and Uber concurrently? 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.
      - sushid 9y ago
        I think OP is agreeing with you. The drivers were not better quality, per se, but Uber's customer service was.
      - Grue3 9y ago
        In Moscow none of Yandex.Taxi drivers drive their own car. They drive a yellow Yandex.Taxi car with standartized livery. A lot of them have zero knowledge of the streets. I took a ride to the airport once and the driver didn't know how to use the toll road. I (who never owned a car in my life) had to explain how to use the damn thing. This is the quality of drivers we're dealing with here.
Tinyyy 9y ago
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?
- JumpCrisscross 9y ago
  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).

109 points by OoTheNigerian 9y ago

baybal2 9y ago

Uber got itself into its own 'LeEco moment'

charlesdm 9y ago

If you can't beat em, join em.

reactima 9y ago

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

baybal2 9y ago
You haven't seen their prices in T2 cities, it is like $1 per 5 to 6 kms. And they have the problem of "Uberists" - people who drive themselves around when Uber subsidizes rides. And they also have issue of botters who do the same, but at industrial scale (without actually driving themselves or anybody else of course)
- martinald 9y ago
  So they have two phones, one for driver and one for customer, and they request rides and accept themselves? Clever.
  - COMMENT___ 9y ago
    How does the driver ensure that he will receive his own order? AFAIK, a driver can reject an order, but this action will badly affect his rating in Uber's system. I think that the rating system helps at least partially to fix this exploit (if it actually is an exploit and not a fantasy).
    - in_cahoots 9y ago
      If you don't receive your own order, have the passenger phone cancel the request and try again. I doubt the utilization is high enough that turning on the driver app immediately accepts a random request.
- throwaway312338 9y ago
  Amusingly, that's comparable or slightly lower than what I'd have to pay for a Auto (tuk-tuk) ride here in India.
lukasm 9y ago
When I was in a small city outside Moscow I was paying $1.50 for a 1 min of a phone call and $1.40 for 10 mins cab ride. It was cheaper to take the cab and talk to someone than to make a call.
- COMMENT___ 9y ago
  Did you call Alpha Centauri? Did you use Russian service provider?
bad_user 9y ago
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.

reactima 9y ago

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

superlopuh 9y ago

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.

adventured 9y ago
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 well enough).
- bwb 9y ago
  So true.
- oscii 9y ago
  > There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. 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.
  - malandrew 9y ago
    > pretty much dependent on the Western products and tech. 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.

Spooky23 9y ago

Seems like a smart move to me. Given the political situation, operating at scale in Russia is a liability anyway. Now they get some cash and a stake in the Russian controlled operation.

amai 9y ago

Maybe relevant: http://englishrussia.com/2017/05/31/russian-airport-taxi-drivers-bought-gps-jammers-to-repel-uber-and-others/ http://englishrussia.com/2017/05/31/russian-airport-taxi-dri...

Grue3 9y ago

Damn. I used both and Uber is cheaper and much better customer service. Trying to get your money back from Yandex.Taxi is a kafkaesque nightmare.

COMMENT___ 9y ago
I don't get it. What money back? For non satisfactory service? Or for not providing the service you paid for?
- Grue3 9y ago
  For example I had a case where a driver did not finish the ride when I got out of the car and did so 30 minutes later in some random location, and I got a huge bill. I also had a driver refuse me to drive me to the destination in the middle of a ride, I also refunded that. Not that Uber drivers don't do shit like this, but I found them more professional. Now that the two companies merged, it's gonna be the worst case scenario with monopoly-driven prices and shit drivers.
  - COMMENT___ 9y ago
    Oh, now I get it. However, aren't you forgetting that a lot of Uber drivers in Russia were or are still driving with Yandex Taxi and Uber concurrently? 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.
    - sushid 9y ago
      I think OP is agreeing with you. The drivers were not better quality, per se, but Uber's customer service was.
    - Grue3 9y ago
      In Moscow none of Yandex.Taxi drivers drive their own car. They drive a yellow Yandex.Taxi car with standartized livery. A lot of them have zero knowledge of the streets. I took a ride to the airport once and the driver didn't know how to use the toll road. I (who never owned a car in my life) had to explain how to use the damn thing. This is the quality of drivers we're dealing with here.

Tinyyy 9y ago

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?

JumpCrisscross 9y ago
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).