It looks like Uber Technologies Inc. is making the first step in its plan to withdraw from costly battles abroad. The San Francisco-based company disclosed that it will be combining its Russian operations with Yandex.Taxi, which is the most popular ride-hailing service in the country.
Both companies announced on Thursday that they will be forming a new joint venture which will be run by Yandex.Taxi’s chief executive, and it will be majority-owned by Yandex NV (NASDAQ:$YNDX), the parent company of Yandex.Taxi. While Yandex will own 59.3%, Uber will hold 36.6%, placing the new entity’s value at $3.7 billion.
The deal itself seems to be yet another surprising turn of events for Uber, which has invested large amounts of money to expand its app in more than 70 countries, providing cash bonuses to drivers and discounted fares to riders in an effort to beat its ride-hailing rivals. However, Uber has met its match in some countries, with unyielding, cash-rich rivals that have local ties and will put up with cutthroat price wars if necessary.
That said, Uber is on route to resolving its rivalries. In August of 2016, Uber called an end to its conflict with Chinese startup Didi Chuxing Technology Co. after both companies ended up spending hundreds of millions of dollars competing for market share. In the end, Uber sold its UberChina unit to the rival in exchange for a 20% stake in Didi and a promise that it would invest $1 billion in their company.
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