Yandex, the Russian online search giant, has inked a deal with Uber Technologies to combine its Yandex.Taxi operations with the U.S. ride hailing service.
On Thursday the two companies said they will form a new joint venture run by Yandex.Taxi CEO Tigran Khudaverdyan.
Uber has agreed to invest $225 million and and Yandex will invest $100 million in the new venture. The investments will go into the joint entity called NewCo. Yandex.Taxi will own 59.3%; Uber, 36.6%, and employees of the company 4.1%, on a fully diluted basis
NewCo will draw on Yandex's strength in search, maps and navigation to develop and sustainable the business tech-wise. The new company will support ride services in 127 cities in six countries.
The transaction has already received board approvals from both Yandex and Uber; it doesn't require shareholder approval.
After the closing of the transaction, consumers will be able to use both Yandex and Uber apps, while the driver-side apps are being integrated. That should lead to shorter passenger wait times, increased driver utilization rates and higher service reliability.
The combined companies support about 35 million rides a month, growing at more than 400% year-over-year, according to Khudaverdyan.
For now, the Yandex.Taxi app, available for download on iTunes and other app stores, works just like Uber or Lyft, allowing people to hail a ride. This app lets riders choose from different service levels: economy, comfort and business.
Earlier this year, Yandex debuted its self-driving car project for its ride-sharing service. The expertise in computer vision required for self-driving cars came from matching similar images in search results and translating text in a photo through its language-service technology.