Russian internet company Yandex’s joint venture with Uber has agreed to buy Russian taxi firm Vezet’s core business, further cementing Yandex’s role as a major online taxi operator in Russia and neighbouring countries.
Taxi, ride sharing and car sharing services have been booming in Russia over the last couple of years after a number of foreign and domestic players invested in online platforms for such businesses.
Yandex, widely known as “Russia’s Google” for its array of online services from internet search to email and taxi reservations, said on Monday that the joint venture, MLU B.V., has agreed to acquire the Vezet Group’s IP and call centres in Russia.
Yandex was a rival of Uber in Russia’s fragmented taxi market until 2017 when they joined forces and set up MLU, with Yandex becoming the controlling shareholder.
MLU now operates across Russia, Armenia, Azerbaijan, Belarus, Georgia and other countries and has expanded into other businesses including food delivery.
Yandex is even considering an initial public offering (IPO) of MLU.
Yandex said MLU will issue new shares to help pay for the Vezet assets, representing up to 3.6% of the issued share capital of the company and up to $71.5 million in cash. It did not give more details of how much MLU will pay for the assets but said the companies expect to close the deal by the end of 2019.
Yandex.Taxi dominates the taxi market in Russia, but there is still room for other players as demand for taxis is growing with the entry of user-friendly online platforms, Gevork Vermishyan, chief executive of Russia’s second biggest phone operator Megafon, told Reuters in an interview published earlier this month. Megafon invested in Yandex.Taxi’s smaller rival, CityMobil, last year.
INVESTMENT IN RUSSIAN REGIONS
Vezet group operates in 123 Russian cities under the Vezet, Taxi Saturn, Fasten and Red Taxi brands. Other big online competitors of Yandex.Taxi in Russia include private taxi company Maxim and Israeli Gett <IPO-GTGE.L>.
Under the deal, MLU plans to invest about 8 billion roubles ($127 million) in the Russian regions over the next three years, Yandex said in a statement.
Yandex will own 56.2% of MLU after the deal and Uber 35.0%, while about 5.3% will be held by employees under the MLU equity incentive plan.
Yandex’s shares were up 0.5% in early trade in New York.
“If the deal takes place, I think it will be positive for Yandex, because the company is strengthening its position in the taxi market and increasing market share,” Vladimir Bespalov from VTB Capital said.
Russia’s Mail.ru Group, which gave a loan to Vezet last summer and has a right to veto the deal, said it had not yet agreed to Yandex.Taxi acquiring Vezet assets.
“Consent has not been given as of now, therefore we consider the announcement premature,” the company said. Vezet said the deal did not violate the terms of the loan.
“We intend to strictly comply with all our agreements with Mail.ru Group,” Vezet’s press service said. Vezet’s management will stay in place and business will continue as usual.
“The deal refers to assets in Russia. We also have business in Czech Republic and Kazakhstan,” Vezet said.
Biggest quarterly loss ever: Uber earnings disappoint as share prices tank
Uber lost $5.24 billion in the second quarter – its largest quarterly loss ever – after making huge stock-based payouts in the months following its initial public offering.
The ride-hailing giant said Wednesday it paid $3.9 billion in stock-based compensation and expenses during the quarter. It also paid $298 million in stock and cash to drivers to show appreciation in connection with the IPO.
Uber’s earnings release comes a day after rival Lyft improved its 2019 outlook, despite a projected loss of nearly $1 billion.
The loss per share including those expenses totaled $4.72 while revenue jumped 14% to $3.17 billion. Analysts surveyed by FactSet expected a loss of $2.03 per share on revenue of $3.31 billion, on average.
“We could push the company to break even if we wanted to, frankly, but I think what you will see from us is…lower losses going forward while at the same time we aggressively invest in new growth levers,” said Uber CEO Dara Khosrowshahi in a conference call with reporters. “But there’s no doubt in my mind that eventually the business will be a break even and profitable business.”
Khosrowshahi said he expects 2019 to be the company’s peak loss year and for the losses to be smaller in the next two years.
Khosrowshahi said he’s confident in the scale of Uber’s ridesharing business and its technical capabilities. He does not expect the Eats food delivery business to be profitable next year or the year after, but said “I think what we have is a great combination of a ride business that is going to turn more profitable over the next couple years, that will allow us to invest aggressively in the Eats business and also carry a bottom line that improves.”
Uber’s shares fell 11% in after-hours trading.
Gross bookings, which is the total dollar value of rides and Uber Eats meals and the amount paid by freight shippers, grew 31% – or 37% in constant currency – compared with the same time last year.
Revenue for the Uber Eats service rose 72% to $595 million. Ridesharing revenue grew just 2% to $2.3 billion because of the one-time driver appreciation payments, the company said.
TLC set to vote on new e-hail rules
The Taxi and Limousine Commission is ready to move ahead Wednesday with new rules for app-based car services despite opposition from some City Council members and hundreds of pages of comments criticizing the plans.
The vote comes two weeks after a daylong hearing that featured a procession of app-based drivers worried about how the rules will affect their livelihood. The TLC is looking to extend a year-old moratorium on new vehicle licenses for Uber, Lyft, Juno and Via, and to reduce the amount of time app-based drivers can cruise without passengers in Manhattan below 96th Street.
The proposals, which would cut empty cruising time to 31% in the next year from the current average of 41%, grew out of a City Council–mandated study of how for-hire vehicles have contributed to congestion. The new regulations would be in addition to a minimum-wage rule that took effect in February along with a congestion surcharge on both FHVs and taxis.
Uber and Lyft, leading a drive against the rules, say that too many regulations have been enacted at once and are threatening their business. Groups such as the Hispanic Chamber of Commerce and the Haitian American Caucus have echoed those complaints, arguing that the TLC is closing off opportunities for recent immigrants, who make up a large share of the drivers.
Some City Council members have also asked the TLC to think twice, saying that the pace of regulation should slow until a new agency head is appointed. The regulator is currently led by acting Commissioner Bill Heinzen.
Many drivers say the license cap has forced them to rent vehicles at a premium rather than drive their own car.
The TLC argues that ridership continues to grow for Uber and Lyft, and drivers have gotten an average pay raise of $500 a month since the minimum-wage regulations went into effect. The agency sees the cap extension and the cruising regulations as essential to reducing congestion and making the app-based companies more efficient.
As for drivers who are paying more to drive because the moratorium prevents them from getting a TLC license for their own car, a spokesman for the agency said it would “seek more information from the vehicle-leasing companies about the rates they charge and the terms of their leases.”
Appy medium: The Taxi & Limousine Commission is right to keep a cap on app-car growth in place
It’s not true that everyone complains about traffic but no one does anything about it. On Wednesday, the Taxi & Limousine Commission is poised, we hope, to take smart action — by voting to continue the freeze on adding new vehicles to the 80,000 app cars driving for Uber, Lyft, Via and Juno now on New York’s roads, and to require that not too many of them are driving empty south of 96th St.
From zero in 2011 to 80,000 today, the app cars have been a boon to many in the four-and-a-half boroughs that yellow taxis ignore. But 80,000 extra cars jockeying for passengers cause lots of traffic, especially on the skinny island where they tend to congregate.
The TLC’s new rules, coming after a thorough study, maintain the pause on the growth of app cars imposed last summer. Contrary to predictions, that didn’t result in longer wait times or people losing their ride. TLC says it’ll raise the cap if service suffers.
Limiting empty cars in the core of Manhattan is also sane. App cars account for almost 30% of all traffic below 60th St., outnumbering even yellows — and 41% of those app cars are empty at any given time (by comparison, there are just 13,587 yellows, 2,000 of which are mothballed). The new rules require no more than 31% of them to cruise empty in the zone.
Former NFL running back Cedric Benson dies in motorcycle crash
FinCEN Director: Casinos Must Report Suspicious Transactions, Including Suspect Use of Cryptocurrencies
Trump accuses New York Times of going on a ‘racism witch hunt’
Entertainment1 year ago
Entertainment12 months ago
The New York Times best-seller list
Entertainment1 year ago
Transportation Alternatives bike month sponsored by Kiwi Energy
MTA News1 year ago
LIRR Weekend Parking Guide
MTA News1 year ago
Access-a-Ride needs access to bus lanes
Business strategies1 year ago
How to Handle Negative Customer Feedback
MTA News1 year ago
MTA’s first female head of NYC subway
MTA News1 year ago
The winners of МТА Genius Transit Challenge