Category: 2017

Choosing a cab has become an increasingly geopolitically tricky decision in the ex-Soviet world after Uber and Yandex set up a joint ride-hailing service in Russia and its neighborhood.

About two weeks ago, US taxi-hailing pioneer Uber and its Russian rival, Yandex, had a marriage of convenience and produced a yet-to-be-named post-Soviet child. The new company is projected to help both companies – particularly, Uber – maximize their returns from Eurasia’s lucrative taxi-hailing markets  (in Russia alone, reportedly worth over $5 billion), currently dominated by Yandex.

But the arrangement, though not yet finalized, seems to have alienated some of the very customers that Uber was trying to reach.   
 
“I am officially deleting the Uber app,” wrote a Facebook user in Georgia when news of the merger hit. She went on to encourage others to follow suit.  

Many Georgians are boycotting Russian businesses in protest against Russia’s ever-expanding occupation of Georgia’s breakaway territories and the perimeter around them. Calls to boycott Yandex, which also runs a top Russian search engine, have been made since it expanded its taxi service to Georgia almost a year ago.

In keeping with the Kremlin’s take on the arrangement of borders to Russia’s south, Yandex shows separatist Abkhazia and South Ossetia on its maps as states independent from Georgia. One Georgian law firm, a prospective legal consultant for Yandex.Taxi in Georgia, walked out on the company last August after discovering how its maps reflected Moscow’s view on the lay of the land.

“Yandex maps disregard Georgia’s internationally recognized borders and we are, therefore, forced to refuse to provide our services to this company. We call upon all our Georgian colleagues to do the same,” the firm, Mgaloblishvili Kipiani Dzidziguri, said at the time.

Now, some Georgian users are reluctant to use Uber because of its association with the Russian company. Yandex will majority-own the merged firm. Beyond the new company, Uber and Yandex will have a joint “roaming” service that will allow its customers to use either group’s apps to call cars outside the “shared” countries.  

“I won’t use either [Yandex or Uber], unless there is literally no other choice,” said Maya Mateshvili, a media consultant based in Tbilisi.  

Others see a potential security risk.

“Take the example of LiveJournal, a blogging platform,” said Giga Paitchadze, a digital media expert in the Georgian capital, Tbilisi. “It started out as an American company. They were successful; they expanded to Russia… and eventually were taken over by Russian oligarchs and that is when things started going south… they were squeezed by the Russian laws, the FSB [Federal Security Service] began asking for user information. Many users started switching to other platforms.”   

“Just imagine if the [Russian] Federal Security Service requests [Yandex-Uber] to provide details on all orders, rides, routes and rates; on who was given a ride, where and when,” Paitchadze went on saying. “That will keep many customers away.”

Further south, in Azerbaijan, the new Yandex-Uber company may be barred altogether, but for different reasons. Yandex.Taxi Chief Executive Officer Tigran Khudaverdian, who will head the merged company, hails from Armenia, Azerbaijan’s mortal enemy.

As a corporation, Yandex is not known to take sides in the fierce enmity between Armenia and Azerbaijan over the breakaway Nagorno-Karabakh territory and adjacent lands. Both Moscow and Yandex maps recognize the separatist region, backed by Russian ally Armenia, as Azerbaijani territory.

But the Armenian-Azerbaijani feud stretches over decades and many dimensions. An Armenian name alone is enough for the Azerbaijani authorities to start talking boycott.         
 
Mais Agayev, the head of Azerbaijan’s State Transportation Agency, said that Yandex-Uber  is not likely to get a license to operate in Azerbaijan if an Armenian national or an ethnic Armenian is at its helm, Haqqin.az reported. He called on riders in Azerbaijan to put the country’s national interests first.

The Azerbaijani authorities, however, did not raise similar objections when Yandex.Taxi expanded its business to their country earlier this year. 

Azerbaijan, though, is not the only no-go zone for the new Yandex-Uber duo. They have not attempted to enter Ukraine, where Yandex is among the Russian companies banned by Kyiv in connection with Russia’s annexation of Crimea and support for rebels in Ukraine’s east.  The Ukrainian government argues that the ban is a matter of national security.

Azerbaijan and Georgia haven’t gone that far yet, and local customers’ objections to Yandex-Uber are unlikely to cripple this new taxi partnership. But the objections go to show that, in business in the Caucasus, as elsewhere, nothing can be assumed.