Uber merges with Yandex, its rival in Russia and Eastern Europe in latest retreat after China

Uber has announced a merger with its rival in Russia in the latest bid by the multi-billion dollar valued startup to start turning a profit.

It will take a 36.6 per cent stake in the combined business which will also include UberEats worth $1.4bn, ploughing an additional $225m in cash into the business. The new firm is valued at $3.7bn.

It’s already invested $170m in its operations in the region since launching three years ago, which also includes Azerbaijan, Belarus and Kazakhstan.

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Yandex, one of Russia’s biggest internet companies, operates five-year-old Yandex.taxi in the country and several others in Eastern Europe.

Uber has already conceded to rivals in China, forming a joint venture with Didi Chuxing last year.

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Pierre-Dimitri Gore-Coty, Uber’s head of Europe, Middle East and Africa, said: “This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business.”

Yandex will hold a majority $59.3 per cent stake in the as yet unamed new company, investing and additional $100m, with Yandex.taxi chief executive Tigran Khudaverdyan heading up the new operation. Uber will hold three board seats.

The retreat comes amid turmoil for Uber after a string of scandals resulted in chief executive Travis Kalanick exiting the startup he founded. It is currently looking for someone to take the helm.