Wednesday, October 21, 2015

Uber is outpaced by 'the Google of Russia'

Russian search engine company Yandex, as we know, is one of the very few examples of success against Google domination across the world. What most of us probably don’t know is, Yandex is also pushing in other frontiers to put pressure on other global tech companies as well. Yandex has not only beaten Google in Russia, but has now entered the $1billion Russian taxi market to outpace and dominate Uber. According to an August article, Yandex taxi fleet is now more than 15,000 vehicles in Moscow, more than the combined fleet size of Uber and Gett. By the end of this year, Yandex plans to expand its coverage to 25 cities across Russia, while Uber is still conservative in the market, available only in 3 cities. Taxi market seems to have become a core element of Yandex strategy now, as the company also invested in another taxi software BiTaksi in Turkey, where Yandex search engine has also reached a considerable market share.

Yandex value proposition is quite obvious for Russian customers, as the typical wait time for taxis is 30 minutes in Moscow. Yandex has developed a software to integrate various taxi fleets in the city to reduce the wait times to 5-7 minutes. While Uber and Gett is mostly present around the city center, Yandex’s coverage is much wider, making it the top choice for many Russians. Yandex also uses an interesting marketing strategy to acquire customers in Russia, where Uber offers free ice-cream and movie tickets to its customers. Yandex, on the other hand, added two Tesla cars, which happen to be the only Tesla cars in Russia, to its fleet. Random rides with Tesla cars seem to have amused Russians, not to mention the hype they create as Yandex Tesla cabs drive around the city.

Yandex, just like Google, is trying to diversify from search engine revenues, which still accounts for more than 90% of their portfolio. It will be interesting to see how Yandex, and other search engine companies, will continue to diversify through expanding into and disrupting other businesses.

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