After the consolidation agreement this spring among Saturn Taxi, RedTaxi, and RuTaxi taxi into one company called Fasten, two more companies Uber and Yandex.Taxi announced their merger on July 13, 2017.

Uber and Yandex will invest USD225 million and 100 million in the new company, respectively. They estimate that the new company will have a value of USD3.725 billion dollars. After the closing of the transaction, Yandex will have a 59.3-percent stake in the company, while Uber will hold 36.6 percent. The remaining 4.1-percent stake will belong to the company’s employees. Yandex.Taxi’s CEO Tigran Khudaverdyan will head the new company. The UberEATS service will also be a part of the new company. Apart from Russia, Yandex’s acquisition covers Azerbaijan, Armenia, Belarus, Georgia, as well as Kazakhstan.

“We don’t expect any radical changes of the rates the passengers will pay as a result of the association – neither now, nor in the future,” Yandex said in a statement.

The transaction, approved by the boards of directors of Uber and Yandex, has already been cleared by the Russian regulator, the Federal Antimonopoly Service. The deal is expected to close in the fourth quarter of 2017.

Yandex has about USD1 billion worth of taxi bookings in Russia on an annual basis. Uber’s total revenue in the Russian market was approximately USD566 million. Yandex’s performance in 2016 demonstrated a net loss of USD35 million.

Yandex’s stock prices increased 18 percent when its transaction with Uber was announced, with the shares’ hitting a record of 1992 rubles (USD33).

Once the transaction closes, both applications for ordering taxi trips, i.e.,
Yandex.Taxi and Uber, will be available to users. The new company will use Yandex’s mapping technologies, navigation services, and search engines. The drivers will use one unified platform and will be able to take orders from Yandex.Taxi and from Uber.

According to VTB Capital, the combined cost of trips of legal taxi carriers in Russia in 2016 was 501 billion rubles (USD8.5 billion). At the same time, the shadow transportation segment has been estimated at 116 billion rubles in 2015 (USD1.9 billion). The share of Yandex.Taxi in Russia in 2016 was about five to six percent.