
Uber Cedes Russia to Yandex with $3.7B Merger Agreement - OoTheNigerian
https://www.bloomberg.com/news/articles/2017-07-13/uber-cedes-russia-to-yandex-with-3-7-billion-merger-agreement
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superlopuh
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.

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adventured
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).

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calafrax
> 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.

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techinformed56
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.

~~~
calafrax
They own a minority stake in an entity that has to pay Yandex for
infrastructure, licensing rights and advertising which Yandex controls.

So this entity racks up a lot of debt (to Yandex) while making transfer
payments to Yandex and then in a few years: "whoops, bankrupt!"

Now the equity holders (Uber) get wiped out and the company re-organizes and
sells its assets (to Yandex) to pay off its debts (to Yandex) and Uber gets
nothing.

Oh, NO! That's not legal! That's not fair! Good luck in Russian court buddy.

They are losing everything. They are burning another $225M to forestal the
inevitable and pretend like it is not a complete loss but it is only a matter
of time.

~~~
techinformed56
Yandex.taxi is a service provided by Yandex. The deal talks nothing about
licesing agreement for Yandex infrastructure (maps etc). So the claim you make
above is under premise that ride sharing will not make money at all and money
spend on infrastructure will be far more than what ride hailing can generate.
So if this assumption is wrong then we are in different argument on whether
ride hailing is a sustainable business at all. Every investor is investing
hoping ride hailing will be a profitable business. If it is then this combined
entity has more to gain than lose.

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calafrax
I am not saying that the business is not profitable. I am just saying that
Yandex is going to take it all.

If Yandex can take Uber's stake, which is worth billions as you say, they
would be stupid not to, and they can, so they will.

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

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baybal2
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)

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martinald
So they have two phones, one for driver and one for customer, and they request
rides and accept themselves? Clever.

~~~
COMMENT___
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
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.

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Spooky23
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.

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

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Grue3
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.

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COMMENT___
I don't get it. What money back? For non satisfactory service? Or for not
providing the service you paid for?

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Grue3
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___
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.

~~~
Grue3
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.

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Tinyyy
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?

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JumpCrisscross
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).

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charlesdm
If you can't beat em, join em.

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baybal2
Uber got itself into its own 'LeEco moment'

