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Uber Faces Off Against Russian Technology Giant Yandex

“3,200 rubles to the center,” says a stocky, prime male in Moscow’s Sheremetyevo Airport, quoting a taxi transport equal to about one-and-a-half times the average Muscovite’s daily wage. He pauses to register awe on the face of his intensity ride. “Alright, alright,” he says. “Special offer then, usually for you: 3,000 and you’re done.”

Souk-style negotiate is still standard for the march at most Russian airfield arrivals halls, with few bargains on offer. But elsewhere in the country, record is king. Today, 3 vast cab smartphone applications are battling for position in a vast and growing cab market, value an estimated $8.5 billion per year. It is misleading that of Israel’s Gett, Russia’s Yandex.Taxi, and California-based pretender Uber will eventually win out.

In late April, Uber done the latest pierce to capture some-more Russian business by undercutting the rivals significantly. It announced that trips to and from Moscow airports would start at a bound rate of only 700 rubles ($11), adult to a third reduce than the competition.

Since entering Russia in 2013 with usually a few cars sealed adult to its service, Uber has stretched rapidly. In April alone, it entered dual new Russian cities, Ufa and Nizhny Novgorod, holding the total to 10. It aims to cover some 40 vital Russian cities in the nearby future.

Valued at some $60 billion, Uber has been indicted of using the large financial advantage to crush the competition. When it arrives in a new market, it lures drivers to its height with reward paychecks and minimal commissions. Since commencement in 2010, Uber has entered a new city any five-and-a-bit days and reportedly run adult waste of hundreds of millions of dollars. Its billionaire investors feet the bill though batting an eye, banking on future increase once the company has cowed the world.

Russia appears to be no exception. Two days after the airport cost cut, Uber announced that over the long Russian May holidays, fares in the renouned Black Sea review of Sochi would tumble by up to 25 percent.

Yet Uber in Russia is still trailing the competition, and by some distance. Its biggest antithesis is Yandex.Taxi, an offshoot of one of Russia’s biggest tech companies. Yandex got into the cab app series early, rising in 2011. Like Uber, it offers safe, clean, complicated cars — no possibility of riding in a beat-up Lada. It now has 40,000 drivers in 17 Russian cities, and boasts some-more than half a million users any month. Gett, that also fast stretched into Russia, lags usually somewhat behind with some 36,000 purebred drivers.

Uber refuses to reveal information on its drivers or finances, though a year ago it had usually one-fifth of Yandex’s fleet. Dmitry Izmailov, Uber’s arch in Russia, would contend usually that the company is witnessing “very fast growth.”

So far, Yandex is relating Uber’s assign with the own. “We don’t devise on giving up,” says Tigran Khudaverdyan, Yandex.Taxi’s arch executive. Khudaverdyan suggested his association was “perhaps even some-more aggressive” than Uber.

Uber and Yandex.Taxi offer a minimum transport cost of 99 rubles ($1.50) for short trips. But Uber undercuts on longer journeys. It takes 8 rubles ($0.12) for each notation and each kilometer in Moscow on longer routes, compared to Yandex’s 9-ruble charge.

Yandex.Taxi claims to offer improved peculiarity service, though that pricing process has helped Uber urge the position in the Russian capital. It now has orders and drivers in droves. “Uber’s are really the lowest rates,” says Mikhail, a gold-toothed Uber motorist creatively from Ukraine. “But the biggest and is that we always get orders.” The longest Mikhail has ever had to wait between Uber orders is 35 minutes. In the city center, float requests arrive most faster.

That is a far cry from five years ago, when cab drivers would mostly wait hours between fares. “A cab in Moscow would take no reduction than 30-40 mins to reach we and the float would cost at least 500 or 600 rubles,” says Bogdan Konoshenko, a cab association executive and member of Moscow’s cover of commerce.

Despite some protest, Russian authorities have valid surprisingly open to Yandex, Uber and similar cab newcomers. One reason for this is the disorganization of potential opposition. Unlike in Europe, Moscow has no cab run that traces the story to the epoch of the horse-drawn carriage driver. It has zero like London’s “The Knowledge,” in which cabbies memorized city maps for years to gain acknowledgment to the trade.

In Moscow the best approach to hail a taxi was to stick out a thumb and haggle a fee with a driver who competence not even have a driving license. It is frequency startling that typical Russians have taken to the new record in such numbers.

The arrival of apps has also stirred a taxi attention bang by increasing efficiency. Average call-out times in Moscow are now around 5 minutes, giving drivers some-more prolific hours. According to government investigate published in March, the average Moscow cab motorist brings in 7,300 rubles ($110) per day — a respectable income by Moscow standards.

Meanwhile, a constellation of smaller companies has popped adult to use the application architecture, charity vehicles and drivers for hire. The taxi marketplace has grown by 85 percent in the 5 years given Yandex.Taxi pioneered the app, the government investigate found. There are one-fifth some-more vehicles giving rides, and the series of taxi companies has doubled.

Moscow authorities dismissed a warning shot over Uber’s bows progressing this year, melancholy to ban the service if it did not occupy usually drivers with cab licenses and share with City Hall the details of routes traveled. Other services had already concluded to the regulations. Employing protected drivers is something Yandex.Taxi says sets the use detached from Uber. Under pressure, Uber concluded to the new rules.

But both companies contend their family with Russian authorities are generally smooth. It seems to be supposed knowledge that the new attention will be dominated by applications. “Those who don’t work with apps are disintegrating from the market,” says Konoshenko.

Meanwhile, the battle between Uber and its rivals is relocating to the regions. There, says Yandex.Taxi’s Khudaverdyan, Yandex’s lead is bigger — “and we are building faster than the competitors.”

Uber has overtaken rivals before, and it’s value is 10 times Yandex’s capitalization of around $6.5 billion. But Khudaverdyan says he is not frightened by Uber’s financial firepower.

They might have low pockets, but, he says, “we have really good brains.” 

Article source: http://www.themoscowtimes.com/article/567906.html

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