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What's going on?
Uber announced on Thursday that its reducing its involvement in Russias ride-hailing market, highlighting the companys recent drive to shape up its finances.
What does this mean?
After four years of expensive competition, Ubers planning to merge its Russian operations with Yandex.Taxi, its biggest rival in the country. Technically, a new company will be created and Yandex.Taxi will own over half of it, while Uber will hold a 37% stake.
Uber did something similar last year, when it sold its Chinese operations to its main competitor in the country, Didi Chuxing, in exchange for a 17% stake in the company Uber had lost billions trying to outcompete it.
Why should I care?
For markets: Uber wants to prove it knows how to slim down.
Uber has managed to somewhat stem its losses recently, but it still loses almost $1 billion every quarter. With Uber eyeing up a potential IPO (i.e. becoming a public company), its likely trying to reign in its costs so that it can convince potential new investors that its on the path to profitability.
The bigger picture: Uber may pull back on more of its global expansion plans.
The next question is whether Uber will keep aggressively expanding into other global markets, or whether itll start paring back and focusing on its more established regions, where it doesnt have to pay as much to gain customers. Some investors in the company are reportedly calling on Uber to cut its losses in markets like India and Southeast Asia and merge its existing operations there with local firms.
Originally posted as part of the Finimize daily email.
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