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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

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.
- konart 9y ago
  What about Gett?
- eps 9y ago
  Uber never dominated in Russia. 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.
  - throwaway34321 9y ago
    > fairly distant second 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.
- calafrax 9y ago
  > Uber is fortunate if they come away from Russia with anything "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.
  - kgwgk 9y ago
    The whole thing "will be valued at $3.73 billion", so it's perfectly possible that the total contribution of Yandex (cash and non-cash) is much larger than the contribution of Uber.
  - oscii 9y ago
    From the article: > 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.
    - deleted 9y ago
      [deleted]
  - skinnymuch 9y ago
    The overall company is worth $3B though, right? Seems like a good deal for Uber since they do half the revenue of Yandex. Uber was never going to be allowed to win Russia and they can lower the money they were pouring into Russia, sans this one time $225M. Probably save more from however much they were hemorraging. Just like with the Chinese merger, I think this is a good thing. Gets Uber to stop burning so much money.
  - techinformed56 9y ago
    If you read other articles you can see that Uber spent 170M in Russia till now. Along with this 225M its a total 395M of spending. And now they got 36.6% stake in a company (now a leader in Russia) worth 3.4B. So Uber got 1.4B. How is that not coming out with anything? Uber did same thing in China. While we all think they lost in China, Uber seems to have spent around 2B or so but got away with close to 8B stake in Didi (leader in China). Any investor will be happy with those returns.
- shubhamjain 9y ago
  I often think how better off Uber would have been had they stayed away from markets which no sane company would chose to compete in until, at least, a few years of founding, let alone an operation-heavy company like Uber. In India, autos are already way inexpensive and customers are too price-sensitive to prioritise service. Although, Uber has become the dominant one here but it'll take a while to understand how profitable the bet on India was. Travis didn't just want to dominate the industry, he wanted to dominate the world: a megalomania to a whole new level.
- gtrubetskoy 9y ago
  > There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. 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.
  - COMMENT___ 9y ago
    > ... funny jokes the navigation voice cracks when you're stuck in traffic 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.
  - deleted 9y ago
    [deleted]
thriftwy 9y ago
I think you're oversimplifying Russian Taxi market a great deal. 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.

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.
konart 9y ago
What about Gett?
eps 9y ago
Uber never dominated in Russia. 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.
- throwaway34321 9y ago
  > fairly distant second 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.
calafrax 9y ago
> Uber is fortunate if they come away from Russia with anything "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.
- kgwgk 9y ago
  The whole thing "will be valued at $3.73 billion", so it's perfectly possible that the total contribution of Yandex (cash and non-cash) is much larger than the contribution of Uber.
- oscii 9y ago
  From the article: > 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.
  - deleted 9y ago
    [deleted]
- skinnymuch 9y ago
  The overall company is worth $3B though, right? Seems like a good deal for Uber since they do half the revenue of Yandex. Uber was never going to be allowed to win Russia and they can lower the money they were pouring into Russia, sans this one time $225M. Probably save more from however much they were hemorraging. Just like with the Chinese merger, I think this is a good thing. Gets Uber to stop burning so much money.
- techinformed56 9y ago
  If you read other articles you can see that Uber spent 170M in Russia till now. Along with this 225M its a total 395M of spending. And now they got 36.6% stake in a company (now a leader in Russia) worth 3.4B. So Uber got 1.4B. How is that not coming out with anything? Uber did same thing in China. While we all think they lost in China, Uber seems to have spent around 2B or so but got away with close to 8B stake in Didi (leader in China). Any investor will be happy with those returns.
shubhamjain 9y ago
I often think how better off Uber would have been had they stayed away from markets which no sane company would chose to compete in until, at least, a few years of founding, let alone an operation-heavy company like Uber. In India, autos are already way inexpensive and customers are too price-sensitive to prioritise service. Although, Uber has become the dominant one here but it'll take a while to understand how profitable the bet on India was. Travis didn't just want to dominate the industry, he wanted to dominate the world: a megalomania to a whole new level.
gtrubetskoy 9y ago
> There was no scenario under which a Western firm was going to be allowed to dominate any meaningful Russian infrastructure long-term. 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.
- COMMENT___ 9y ago
  > ... funny jokes the navigation voice cracks when you're stuck in traffic 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.
- deleted 9y ago
  [deleted]

thriftwy 9y ago

I think you're oversimplifying Russian Taxi market a great deal. 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.