|Bid||45.00 x 3200|
|Ask||45.49 x 900|
|Day's range||44.34 - 45.46|
|52-week range||28.91 - 45.46|
|Beta (5Y monthly)||2.04|
|PE ratio (TTM)||10.48|
|Earnings date||13 Feb 2020|
|Forward dividend & yield||N/A (N/A)|
|1y target est||47.10|
(Bloomberg) -- Vladimir Putin is putting his trust in an obscure technocrat with little political experience to be prime minister and revive Russia’s flagging economy, as he prepares the country for the most significant constitutional overhaul in a generation.Mikhail Mishustin, head of the Federal Tax Service, last held a political post in the government as a deputy tax minister for five years to 2004. Putin signed the order appointing him formally on Thursday after lawmakers in the lower house of parliament voted overwhelming to confirm his candidacy, with 383 in favor and none against.His nomination won plaudits from economic reformers and business leaders, aware of his record of transforming tax collections through efficient use of modern technology and encouraged by expectations he’ll focus on boosting growth.“Mishustin can relate to business like no one else,” said Alexei Kudrin, a former finance minister and now head of the Audit Chamber, a government watchdog. “He has a vision for the economy that I hope will lead to a modern and effective development program.”While he’s not widely known outside of the tax authority, Mishustin developed a rapport with Putin as a member of the president’s Night Hockey League. A long time hockey enthusiast, he sits on the supervisory board of Moscow’s CSKA club together with Igor Sechin, a Putin confidant who runs Russia’s state-run oil giant Rosneft PJSC.The new prime minister is also an amateur musician and has penned pop songs as a hobby, including for singer Grigory Lepsveridze, who was sanctioned by the U.S. in 2013 for alleged ties to organized crime.Mishustin, 53, led the tax service from 2010, creating a state-of-the-art system that involves real-time reporting to minimize avoidance. It helped tax payments grow far more quickly than Russia’s gross domestic product for the last five years.‘Brave New World’“Before, you needed a bottle of vodka to figure out your declarations,” Yandex NV Deputy Chief Executive Officer Tigran Khudaverdyan said of Mishustin’s reforms. “But now it’s a brave new world where everything is simple.”Prior to taking over the tax authority, Mishustin spent two years as president of UFG Asset Management, a Russian investment business that was set up by U.S. investor Charles Ryan and former Finance Minister Boris Fedorov. The PhD economist also led state agencies including the federal land registry and a body responsible for managing special economic zones.His unexpected nomination capped a day of surprises after Putin accepted the resignation of the government of the long-serving prime minister, Dmitry Medvedev, on Wednesday. Medvedev said the president needed a new team to implement the vision Putin had outlined hours earlier in his state-of-the-union address, involving sweeping constitutional changes aimed at boosting the powers of parliament and another body called the State Council.Medvedev’s job had long been rumored to be at risk as Russia’s economy stagnated and wages shrank for five years running, helping to erode Putin’s popularity. The president also announced a raft of new spending measures that are expected to boost growth.Mishustin told lawmakers that he will work to restore trust between business and the authorities while speeding up Putin’s National Projects infrastructure-spending program. Those initiatives stalled in the bureaucracy last year, failing to deliver the hoped-for stimulus and prompting Putin to criticize the government.“Mishustin revolutionized tax collection in Russia, where tax evasion has long been a national sport,” said Max Nalsky, a co-founder of IIKO, one of Russia’s leading software providers for restaurants. “I can’t think of any other state agency that is as progressive in IT and digitalization.”(Updates with confirmation vote in second paragraph)\--With assistance from Ilya Arkhipov.To contact the reporters on this story: Jake Rudnitsky in Moscow at email@example.com;Evgenia Pismennaya in Moscow at firstname.lastname@example.orgTo contact the editors responsible for this story: Torrey Clark at email@example.com, Tony Halpin, Gregory L. WhiteFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Vladimir Putin’s new prime minister pledged to work with business and overhaul the cabinet after a surprise shakeup that may enable the president to extend his 20-year rule.Mikhail Mishustin won a confirmation vote in the lower house of parliament Thursday with 383 of the State Duma’s 450 lawmakers voting in favor. Putin had moved quickly to nominate the former tax chief after the departure of his long-serving prime minister on Wednesday.“To ensure further growth of GDP, first of all we must stimulate investment, that’s very important,” Mishustin said in the Duma ahead of the vote. The government should “restore the trust lost between the authorities and business and talk seriously about reducing costs and excess pressure.”Surprise ShakeupPutin’s proposed constitutional amendments include granting more powers to the parliament and another body called the State Council, while the presidency would see its sweeping authority reduced somewhat. The changes could allow the Russian leader, who faces a constitutional ban on running again when his current term ends in 2024, to retain power in another role.Dmitry Medvedev, one Putin’s longest-serving lieutenants, tendered the resignation of his government after the speech, saying that the president needed a new team to implement his vision. Removing Medvedev, widely blamed for lackluster economic performance and stagnant living standards in recent years, could help the Kremlin boost public support. An increase in government spending set for this year is expected to accelerate sputtering growth.“Our hope and expectation of the new government is that it will more effectively implement the National Projects and work more actively on economic issues,” Vyacheslav Volodin, State Duma speaker, told reporters. “Without achieving growth rates above the global average we can’t resolve social issues.”Mishustin, 53, told legislators he’d focus on implementing Putin’s National Projects infrastructure-spending program as a top priority. Implementation of those initiatives had stalled in the bureaucracy last year, slowing economic growth and drawing public criticism of the government from Putin. Mishustin also vowed to stick with the current tight-money policies that have helped bring down inflation.“The replacement of the government has for many increased hopes that the new team will be able to do more” on reforms, Alexei Kudrin, former finance minister and now head of the Audit Chamber, a government watchdog, told a conference Thursday. Mishustin “has a better feel for the situation in business and knows how to balance the interests of business and the state,” he said.Cabinet PicksIt’s the first time since 1996 that a nominee for prime minister received no votes against his candidacy from lawmakers, Volodin said. Mishustin told reporters after the vote that he’ll present his proposed new government to Putin soon.Investors are watching closely the fate of Anton Siluanov, who as first deputy prime minister and finance minister in the last government won a reputation as a steward of tight budget policies that made Russia a favorite for foreign bond-buyers. Russian bond yields recovered Thursday after jumping the most in two months on the news of the cabinet shakeup Wednesday.“Without knowing the names of the new ministers and their views, policy continuity is not certain,” Morgan Stanley economist Alina Slyusarchuk wrote in a note. “We could see more expansionary fiscal policy, or more structural reforms, or the changes could be purely political with economic policy unchanged.”Mishustin said there would be changes in the cabinet and the appointments would be announced soon, according to Alexander Khinshtein, a ruling-party legislator who attended the meeting. A Communist lawmaker said Mishustin had pledged to make major changes in the government but didn’t give specifics, RIA Novosti reported.A PhD economist who ran an investment business, Mishustin has a reputation as an efficient technocrat with a low political profile. Named to head the tax service in 2010, he tamed legendary Russian evasion by installing a nationwide computerized reporting system that works in real time, making the agency one of the government’s most technologically sophisticated.Yandex BoostShares in Yandex NV, Russia’s leading Internet company, jumped as much as 7% after a legislator said in an online post that Mishustin had promised to support the company.“Without a doubt, the government should be a digital platform that’s created for people. That’s what we tried to do with the tax system,” Mishustin told legislators Thursday, according to a video posted by a parliamentary official. “The most important thing is to remove limits for business.”Prior to the tax authority, Mishustin led reforms at several other state agencies, including the federal land registry. He also has a background in private business and served as president of UFG Asset Management, part of one of Russia’s biggest investment houses, from 2008 to 2010.As Mishustin was addressing legislators, Putin led a meeting of the new panel of dignitaries -- including legislators, officials, as well as prominent musicians and athletes -- set up to draft the constitutional changes, Interfax reported. A national vote on the proposals could come before May 1, Tass quoted a senior legislator from the upper house as saying.(Updates with Mishustin winning parliamentary vote)\--With assistance from Jake Rudnitsky, Ilya Arkhipov and Anna Baraulina.To contact the reporters on this story: Andrey Biryukov in Moscow at firstname.lastname@example.org;Stepan Kravchenko in Moscow at email@example.comTo contact the editors responsible for this story: Gregory L. White at firstname.lastname@example.org, Tony Halpin, Natasha DoffFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
MOSCOW and AMSTERDAM, the Netherlands, Jan. 15, 2020 -- Yandex (NASDAQ and MOEX: YNDX) today announced it will report its financial results for the fourth quarter and full year.
The Russian tech giant Yandex plans to expand its car-sharing service to Europe, in a bet that it can find a niche as some of the continent’s largest participants retreat from the market. Anton Ryazanov, head of its in-house start-up Yandex.Drive, told the Financial Times that the company would launch a test service of up to 1,000 electric cars in a yet-to-be determined EU city this year. Yandex is considering cities with favourable conditions for electric cars including Madrid and Copenhagen, as well as others in France and Italy, Mr Ryazanov said.
Yandex (NASDAQ:YNDX), a technology company that builds intelligent products and services powered by machine learning, announced that it will be providing demonstration rides in its self-driving cars with no one behind the steering wheel on the public streets of Las Vegas during CES 2020. Following CES, Yandex will head to Detroit where it will provide an autonomous taxi service with an expanded fleet of self-driving vehicles for the visitors of the June 2020 North American International Auto Show. In its second year at CES, Yandex is operating its self-driving vehicles in driverless mode, around the neighborhoods of the Hard Rock Hotel.
Yandex N.V. (NASDAQ and MOEX: YNDX), a technology company that builds intelligent products and services powered by machine learning, today announced that its shareholders have approved the proposed restructuring of the corporate governance of the Yandex group, as described in the Shareholder Circular dated November 18, 2019. In connection with the proposed restructuring, Alexey Komissarov and Alexei Yakovitsky were appointed as non-executive members of the Board of Directors for terms ending at the Annual General Meeting to be held in 2023. "We are grateful for the trust our investors have placed in us, and for such overwhelming support for the changes that the Board proposed last month," said John Boynton, Chairman of the Board of Yandex.
(Bloomberg Opinion) -- To many Americans, Ukrainian President Volodymyr Zelenskiy is merely a character in the U.S. impeachment drama, an awkward English speaker from a remote, corrupt country that would be eaten up by Russia if not for U.S. assistance. But the former comedian who took Ukraine by storm earlier this year is much more than that: He’s the only kind of threat Russian President Vladimir Putin has any reason to fear.The election campaigns Zelenskiy ran this year, which the world didn’t watch attentively enough, were widely followed in Russia: the Ukrainian elections were the most searched event of 2019, according to the Russian search engine Yandex, and Zelenskiy was the most searched personality. For Russians, the fact that someone like him could become president in a neighboring post-Soviet country provides ample food for thought; Russians have lived so long under Putin that no cat born during his predecessor’s rule is likely to be alive today. To add insult to injury, Zelenskiy, in his endearingly bungling way, keeps getting results that eluded his more experienced predecessors, even if they’re not enough yet to make Ukraine truly European.No Laughing MatterZelenskiy’s political career began in the first minutes of the year. The Ukrainian TV channel 1+1, which had run the comedy shows of his crew, Kvartal 95, bucked a long-standing tradition by replacing President Petro Poroshenko’s New Year’s address with a short announcement by Zelenskiy that he was going to run against Poroshenko in the March presidential election.Not everyone took “the clown” seriously then: Zelenskiy, only 41, had no political experience, lacked the gravitas of his rivals and had once pretended, on national television, to play the piano with his genitals. He had no ground game, having only recently registered a political party, Servant of the People, named after a successful TV series in which Zelenskiy played a history teacher who unexpectedly gets elected president of Ukraine. He refused to make any firm promises, talking only about things he’d like to try, such as ending the war with Russian proxies in the country’s east. He spoke better Russian than Ukrainian, and his Jewishness made him an unusual presidential contender in a country where almost half the adult population harbors anti-Semitic attitudes, according to the Anti-Defamation League.But a lean, masterful, social media-savvy campaign quickly propelled Zelenskiy to the top off the polls. Poroshenko ran on a conservative platform that stressed building up the Ukrainian language and the military, as well as a stronger Ukrainian Orthodox church free from Moscow’s influence. But those declared values contrasted sharply with a string of corruption scandals in Poroshenko’s close entourage. Ukraine was ready for radical change, not retrenchment. The voters were so tired of Kyiv’s post-Soviet political swamp that they didn’t much care if the change were as chaotic and comical as in the “Servant of the People” series. They wanted sincerity above all.Zelenskiy also received unexpected support from well-known reformers who had tried to revive Ukraine’s economy under Poroshenko but were forced out as oligarchs’ interests prevailed. Former ministers with strong reputations in the West made the comedian acceptable to Ukraine’s foreign donors and investors — and Zelenskiy didn’t even have to promise them jobs.Zelenskiy came in 13 percentage points ahead of Poroshenko in the first round of the election on March 31, and that led to a stunning visual: A debate between Zelenskiy and Poroshenko in front of more than 60,000 people in the country’s biggest sports arena in Kyiv. The show was avidly watched in Russia, where about 6 million people saw it in real time. Maria Zakharova, spokeswoman for the Russian Foreign ministry, likened the event to a circus performance meant to “keep deceiving Ukrainians,” and other Russian officials poured scorn on the Ukrainian politicians, who at one point kneeled before their voters — something impossible to imagine in Russia. But Ukraine envy was widespread on the Russian social networks that day. “At least they have a choice,” a commentator wrote on the hip-hop-themed Russian website Flow, where the debate was discussed as a rap battle. “It’s better to be a pig in a poke than a wolf in sheep’s clothing,” Zelenskiy quipped during the debate. He won it, and he prevailed in the run-off by a landslide, 73% to 24%. After this, it was no surprise in July that the Servant of the People party won 254 seats in Ukraine’s 450-seat parliament, the first outright majority for any party in Ukraine’s history. In one constituency, a wedding photographer representing the party beat a billionaire; in another, a schoolteacher defeated a former presidential chief of staff — something else that could never happen in Putin’s Russia.Skirting DisasterWhat can one expect from a novice president, one of the youngest leaders in the world, backed by a parliamentary faction of wedding photographers and other lucky outsiders, in a country ravaged by a slowly-simmering war and abandoned by millions of workers? Poroshenko and his supporters anticipated a disaster: The economy mismanaged, national interests betrayed to Putin. Zelenskiy, however, has managed to hold his own, despite some understandable setbacks, and he’s begun making important changes.Zelenskiy and his young team had been naive about some pretty basic things. During the election campaign, the future president promised to move to a modern office from the Soviet-style presidential administration building on Bankova street, but it became clear almost immediately after the election that such a move would be too expensive and difficult from a security point of view. And if voters expected Zelenskiy to ride a bicycle to work, like his character in “Servant of the People,” they were predictably disappointed, even if Olexiy Honcharuk, at 35 Ukraine’s youngest ever prime minister, did make a video of himself riding a scooter along the government’s corridors.Equally predictably, it proved difficult for Zelenskiy to move as quickly as he’d like to resolve Ukraine’s conflict with Russia. It took considerably longer than planned to carry out the first major prisoner exchange in years with Russia and its proxies in eastern Ukraine. Zelenskiy did manage to get 35 prisoners freed in September, including movie director Oleg Sentsov, who had become internationally famous for his months-long hunger strike in a Russian prison, but he had to give Russia a key witness and potential accessory to the 2014 downing of Malaysia Airlines Flight 17, a tragedy now being investigated by a Dutch-led international team.Zelenskiy also discovered that, although his efforts to achieve a mutual troop pullback in eastern Ukraine were approved by 59% of Ukrainians, nationalist combat veterans were fiercely opposed to anything that looked like a Ukrainian retreat. It took Zelenskiy weeks to get the vets — armed though no longer in service — to stop preventing the pullback. This important group, treated as untouchable heroes under Poroshenko, will remain a problem for Zelenskiy. At some point, he may have to move openly against them. The current trial of several nationalist combat vets for the 2016 murder of a prominent journalist in Kyiv provides the president with an opening for such a shift.Earlier this month, Zelenskiy’s first meeting with Putin ended uneventfully: The Ukrainian leader doesn’t really have a mandate for an audacious gambit like holding elections in the areas now controlled by pro-Russian forces. Poroshenko is waiting in the wings for Zelenskiy to try something like this, and another street revolution — Ukraine has already had two — can’t be ruled out. Russia wants the Ukrainian president to change the constitution, granting a broad autonomy to its eastern areas, but the constitutional amendments proposed by Zelenskiy this week don’t do that, proposing instead a relative empowerment of the local authorities throughout Ukraine, but under the control of presidential representatives.Another big problem for Zelenskiy is his old business relationship with Igor Kolomoisky, the billionaire owner of 1+1 TV. When it became clear that Zelenskiy would win the presidency, Kolomoisky moved back to Ukraine from self-imposed exile in Israel. He’s trying to win compensation for the 2016 nationalization of his bank, Privatbank Commercial Bank PJSC, which the Ukrainian government under Poroshenko accused him of plundering. Kolomoisky denies the accusations; meanwhile, former and current managers at the National Bank of Ukraine complain that Kolomoisky is waging an intimidation campaign against them. Zelenskiy has squandered much of his political capital with the slow-motion peace process, inaction in response to suspicions of excessive closeness to Kolomoisky and the lack of a spectacular anti-corruption effort, which many expected from Zelenskiy the clean-hands candidate. He’s still supported by a majority of Ukrainians, but no longer by three-quarters of the country.It’s possible, however, that Zelenskiy’s popularity will rebound thanks to an improving economy. Zelenskiy already has been blessed with an unexpected economic growth surge, supported by a bumper harvest and a general increase in optimism since his election. In the three months through September, the median of six economic forecasts tracked by Bloomberg was 3.3% real gross domestic product growth; in reality, the Ukrainian economy expanded by 4.2% year over year.There are reasons to expect Ukraine to keep beating such high expectations (forecasters tracked by Bloomberg see a 3.1% expansion next year and a 3.4% one in 2021). Zelenskiy has moved to end Ukraine’s infamous land sales moratorium next year, legalize gambling, liberalize alcohol production and privatize government-owned companies, including the state railroad monopoly. The government also is working on improving tax collection. And, though the International Monetary Fund had its doubts about the new government’s ability to overcome obstacles such as Kolomoisky's seeming ascendancy, it has given its preliminary approval to a three-year $5.5 billion lending program for Ukraine earlier this month.Though some of these measures, especially opening the land market and the closing of tax loopholes, are unpopular, they should stimulate growth in the immediate future. But even today, Ukraine’s economy is more dynamic than Russia’s.A Human FaceThere’s little doubt that Zelenskiy’s progress is watched jealously in the Kremlin. If he proves a winner, Putin will look dated and clueless next to the young, sincere and very human leader of the neighboring country. Even now that Zelenskiy’s presidency is more about promise than provable progress, the unflattering comparisons can hardly be avoided.Earlier this month, the Russian TV channel TNT unexpectedly aired the first three episodes of “Servant of the People.” One of them, however, included a nasty Putin joke. Zelenskiy, playing the accidental president, is offered a choice of expensive watches to wear; one is a Hublot, and Zelenskiy’s character is told that Putin wears watches of the venerable Swiss brand. In fact, the Russian leader has never been seen with a Hublot on his wrist, but the brand name sounds similar to a Russian obscenity that Ukrainian soccer fans have firmly attached to Putin’s name in a popular chant. The episode with the joke was aired in full to the Russian Far East, but then someone apparently noticed the impermissible mockery of the Russian president, and the bit about the watch was cut from the broadcast for the rest of Russia. Then TNT announced it would no longer show “Servant of the People” on its free-to-air channel and that it never intended to air it in full.“I really regret this,” Zelenskiy commented on the Russian channel’s decision to pull the series. “It’s a strategic matter. You know who has the nuclear weapons and who has ‘Servant of the People.’”He couldn’t be more right. He’s Ukraine’s not-so-secret weapon against the leviathan to the northeast, because he’s living evidence that a former Soviet country doesn’t have to tolerate a fusty authoritarian regime. Government with a human face isn’t about imperial greatness, it’s fallible and fragile, but — especially if it gets results — it can be irresistible to people who are tiring of greatness at the price of stagnation and oppression.The Zelenskiy weapon doesn’t require help from the U.S. to deploy, although the Ukrainian president certainly would appreciate U.S. support once American politicians remember that Ukraine isn’t just an impeachment prop. It’s up to the novice president and the Ukrainian people to make sure it works. There are good reasons to hope that, in the longer run, it will.To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Sarah Green Carmichael at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Apple, Amazon and Alphabet form an alliance to gain from growing clout of connectivity devices and a booming smart home space. Let's take a look at what others are up to.
(Bloomberg) -- Russian police raided the offices of Nginx Inc., a U.S. company behind one of the largest web server projects, and briefly detained its founder in a case that could stoke renewed fears of law enforcement being used to settle corporate disputes.Russia’s Rambler Group, the parent company of one of the country’s biggest search engines and internet portals, said in a statement Thursday it uncovered copyright violations to its exclusive rights to Nginx, which was acquired by Seattle-based F5 Networks Inc. this year in a deal that valued the company at $670 million.The dispute centers around the development of Nginx’s original open-source web server code by Igor Sysoev when he worked at Rambler nearly two decades ago, so Rambler sees itself as the rightful owner of the code. Nginx was first released publicly in 2004. It now controls more than 30% of the server market for web-facing computers, behind only the Apache Foundation, according to Netcraft, which monitors the industry.The raid is the latest example of the widespread use of Russian law enforcement in corporate disputes. U.S. investor Michael Calvey, one of the most successful private equity investors in Russia, was jailed this year and remains under house arrest over what he claims is a business conflict.Maxim Konovalov, who co-founded Nginx Inc. in 2011, linked the raid to the May sale of the company. He and his partner Sysoev were briefly detained during the Thursday raids of their apartments and the company’s Moscow office.“We fear for our freedom,” Konovalov said by phone. “Rambler didn’t pay attention to us in the preceding years.” Konovalov said he and Sysoev are “not going to flee Russia. We will stay and we will fight.”Igor Ashmanov, who was an executive at Rambler when Sysoev worked there, said Sysoev had started developing the technology underlying Nginx before he joined the company. Sysoev left Rambler in 2011 to co-found Nginx. The company is based in San Francisco but has offices around the world.Yandex NV, Russia’s biggest tech company, called the raid a “very bad signal.” Several IT industry associations condemned the action, according to an open letter published on the Govorit Moskva radio station’s website.Rambler, owned by billionaire Alexander Mamut and Sberbank PJSC, said it ceded its rights to Nginx to a Cyprus-owned holding company, Lynwood Investments CY Ltd.Lynwood is controlled by Mamut’s son Nikolai, according to Interfax news agency.Lynwood said by email it informed law enforcement about the situation and the authorities opened up a criminal case. The company declined to comment on its ownership.F5 and the police did not immediately respond to requests for comment.Sberbank First Deputy Chief Executive Lev Khasis, who is the chairman of Rambler’s board, said he found out about the dispute via media reports and has requested an extraordinary board meeting this month to deal with it.“I don’t like that this is a criminal trial,” Sberbank Chairman Herman Gref told Forbes, adding that this is a case for the arbitration court.Despite pledges from President Vladimir Putin to better protect business from inappropriate pressure from law enforcement, it remains a common tool to settle commercial disputes in Russia.A survey by the Kremlin’s business ombudsman found 84% of business executives who are subject to criminal investigations end up losing part or all of their business, RBC reported earlier this year.\--With assistance from Anna Baraulina and Ilya Arkhipov.To contact the reporters on this story: Stepan Kravchenko in Moscow at email@example.com;Jake Rudnitsky in Moscow at firstname.lastname@example.orgTo contact the editors responsible for this story: Torrey Clark at email@example.com, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Uber Technologies Inc. and its rivals disrupted global transport, riding on a lack of regulation to drive exponential growth. Now, regulators are closing in.London’s transport authority banned Uber for a second time on Monday, citing concerns about customer safety after vulnerabilities in the app let drivers fake their identities in thousands of rides.The decision shows that regulatory scrutiny of passenger safety is intensifying -- adding a new front in a global crackdown that had focused on drivers’ rights. Uber isn’t just drawing ire in Europe. It faces problems related to sexual assault and a fatal roadside incident involving a self-driving car in the U.S. Rival Lyft is under pressure in San Francisco in sexual assault cases and Didi is under fire from regulators in China over its safety record.The deepening pressure hits at the core of the business model of ride-hailing companies, which often operate at a loss as they undercut traditional taxi services to win users and aggressively expand into new markets. That makes them particularly vulnerable to increased costs associated with new regulations. And that’s spooking investors.Uber shares have dropped 34% since it listed in May. Rival Lyft is also down about 32% since its March initial public offering.“The horror show of bad news since its IPO continues for Uber,” wrote Wedbush Securities analysts Ygal Arounian and Daniel Ives in New York.Representatives for Uber and Lyft didn’t immediately respond to requests for comment.Piling UpFor Uber, the loss of its license in London puts one of its biggest markets outside of the U.S at risk. The regulator found unlicensed users pretending to be Uber drivers and faking their identities in at least 14,000 trips.While Uber said it had caught the vulnerability in its system and patched it, the regulator wasn’t convinced. One of the drivers implicated had his license suspended after he was caught peddling indecent images of children, a spokesman for Transport for London said.Passenger safety has long been a contentious issue for ride-hailing startups.Chinese giant Didi Chuxing came under scrutiny in May 2018, when state media reported a driver used his father’s account to pick up and kill a woman in the central Chinese city of Zhengzhou. In 2014, an Uber driver in India took a woman to an isolated area and raped her, a Delhi court found.A woman in the U.S. said she was raped last year after she got into a car with an Uber decal and was driven to a secluded location and attacked. Uber beat back her lawsuit, but the judge suggested in her ruling this month that the company is opening itself to trouble if it allows its decals to remain on vehicles belonging to dangerous drivers.No GuaranteeIn October, the chairman of the U.S. House Transportation and Infrastructure Committee called ride-hailing companies out for conducting “woefully inadequate” background checks on drivers.“Uber may need to improve background checks on drivers and even the app itself,” said Bloomberg Intelligence Analyst Aitor Ortiz, alluding to its latest problems in London. “(But) this won’t guarantee Uber a new license, and threatens to reduce margins in a city where increasing competition from companies such as Ola, ViaVan and Bolt is adding to pressure on ride prices.”U.K. Labour Leader Jeremy Corbyn made clear what such companies may have in store if his party wins the vote next month.“Uber must play by the rules,” he tweeted on Monday. “A Labour government will not tolerate companies which exploit their workers, don’t pay their fair share of taxes and disregard passengers’ safety.”Closing InThe focus on passenger safety comes as rules over driver rights begin to bite.New York Mayor Bill de Blasio’s effort to boost pay for drivers and cut congestion on the streets of the city may have contributed to the bankruptcy of Juno, a New York-based ride-sharing startup. Juno’s owner, Gett Inc., called the new regulations “misguided” in a statement this month.A new California law is giving workers in the gig economy the right to a minimum wage. A similar battle will soon be underway in New York, where lawmakers are planning to take up gig worker legislation next year.Read more: Uber Accused of Cheating the Public in Driver Suit Over PayTax authorities are also catching up with ride-hailing start ups. In November, New Jersey declared that Uber owes it $650 million in unemployment and disability insurance taxes because the ride-share company has been misidentifying drivers as independent contractors.Uber expects to lose between $2.8 billion and $2.9 billion this year. Questions are also being posed about Didi’s path to profitability after blitzing the market with heavy subsidies to grab market share from rivals. Only Russian operator Yandex.Taxi has so far turned profitable.Courting ControversyStill, Uber, which has a reputation for bullying its way into new markets and inspiring sometimes violent protests, is no stranger to controversy. It remains to be seen how it reacts to this new wave of scrutiny.Chief Executive Officer Dara Khosrowshahi, who flew to London to make peace when Uber was originally banned in 2017, has no such plans this time. In a tweet, he called the decision “just wrong.”Analysts including those at New Street and Loop Capital remain optimistic Uber will continue operating in London. The appeals process means that the company may not have to actually leave London for years, if ever.“In the long run, we expect that Uber will be operating in London, although we cannot rule out the possibility of periods of uncertainty as these regulatory challenges present themselves,” said Loop analyst Jeffrey Kauffman.To contact the reporters on this story: Amy Thomson in London at firstname.lastname@example.org;Nate Lanxon in London at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Vidya RootFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Yandex NV, Russia’s biggest technology company, has figured out how to avoid nationalization or a foreign ownership ban. Big Tech in the U.S. should pay attention: The governance scheme Yandex appears to have worked out in consultation with the Russian government could be a good solution for companies that are de facto public utilities under private control.Yandex, set up in 2000 to monetize a search engine developed in the 1990s by the team of co-founder Arkady Volozh, is as close as it gets in Russia to a Silicon Valley-style internet giant. For a long time, it mainly aped Google’s services for the Russian market, but it has grown into a conglomerate that developed or bought up other businesses, from marketplaces to delivery projects. It’s not just Russia’s Google but Russia’s Amazon and Russia’s Uber, too (it first outcompeted Uber’s Russian operation, then swallowed it up). In fact, when Russian President Vladimir Putin signed a “sovereign internet” law earlier this year, officially meant to keep web services functioning inside Russia should the U.S. cut the country off from the worldwide computer network, many said Yandex would be that “sovereign internet.”Yandex’s size and its ability to match the tech giants have made the company strategic for the Russian government. As early as 2009, Volozh had to protect Yandex from nationalization or from being taken over by one of Putin’s billionaire friends by issuing a “golden share,” which could block the sale of more than 25% of the company’s stock, to state-controlled Sberbank.But the government also could be helpful when Yandex needed it. In 2015, the Russian tech giant filed an antitrust complaint against Google, which had been eating into its market share on mobile, and in 2017 Google had to settle with the Russian antitrust authority, allowing Android smartphone vendors to install Yandex apps. Now, the Russian parliament is considering a bill that would ban the sale of phones and computers without pre-installed Russian software. Yandex would be the main beneficiary.In Putin’s mind, that kind of protection comes at a price: Yandex must guarantee that it will never fall under foreign control. The previous “golden share” arrangement didn’t quite rule that out. Volozh and top employees control the company’s Class B stock, which gives them 57% of the voting power. If those shares are sold or their owners die, Class B shares will automatically convert to Class A ones, which are traded on stock exchanges, and foreign shareholders will end up with the most voting power.In July, legislator Anton Gorelkin introduced a bill that would limit the foreign ownership of strategically important internet companies to 20%. Yandex opposed it, but the government approved it, and it became clear that the bill would be passed. So Volozh began working feverishly on a solution, which was finally announced on Monday “after many months of discussion,” as Volozh wrote in a letter to employees. The company has set up a special body called the Public Interests Foundation, made up of representatives of Russia’s top math, engineering and business schools (most of them owned by the state) and Russia’s big-business lobby, the Union of Industrialists and Entrepreneurs. The foundation will have two seats out of 12 on Yandex’s board of directors, and it will have a veto on all deals involving 10% or more of Yandex stock, big intellectual property sales and any transfer of Russian citizens’ personal data.Putin’s press secretary, Dmitry Peskov, denied that the Kremlin had taken part in the discussions mentioned in Volozh’s letter, but praised Yandex for appreciating the company’s “special responsibility” and the “special attention” on the part of the state that it enjoys. Immediately after the Yandex announcement, Gorelkin called the solution “elegant” and pulled his bill. All this was immediately reflected in a share price spike.This may read like a distinctively Russian story, in which a group of business founders is trying to avoid a state takeover and the Kremlin prefers not to establish formal control over the national tech champion while keeping a close eye on it. The schools provide a convenient smokescreen both for the government and for investors. But what Yandex has done isn’t only relevant within the context of Putin’s Russia. It could be seen as a template for Big Tech, even though Yandex’s market capitalization, at $13.2 billion, is only a fraction of Alphabet Inc.’s ($910.6 billion) or Facebook Inc.’s ($562.9 billion).These two companies that make up the internet’s advertising duopoly, are often discussed along with Amazon.com Inc. as public services rather than mere businesses by politicians on both the right and the left of the U.S. political spectrum. Last year, Republican Representative Steve King of Iowa proposed treating Google and Facebook as public utilities. Senator Elizabeth Warren of Massachusetts, a leading Democratic presidential candidate, would break up some of the Big Tech companies and designate some as “platform utilities” that would be banned from sharing user data with third parties and required to treat all users equally.Obviously, the tech firms are opposed to such heavy-handed regulation, but what they do on their own only brings them closer to a confrontation with governments, both in the U.S. and in Europe. Facebook’s refusal to police misleading political advertising and Google’s data-sharing practices scream for some kind of state interference. Like Yandex, the companies could act preemptively to set up governance structures that would veto business ideas viewed as damaging to society’s interests. Vesting veto powers in councils made up of the representatives of top universities and nongovernmental organizations could accomplish that purpose. If such a structure can win approval even from an authoritarian regime such as the Russian one (with the caveat that academic institutions in Russia aren’t as independent as those in the West), it could probably satisfy most Big Tech critics in democracies, too. The alternative, as in Yandex’s case, could be far more restrictive.To contact the author of this story: Leonid Bershidsky at email@example.comTo contact the editor responsible for this story: Jonathan Landman at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Yandex (NASDAQ and MOEX: YNDX), one of Europe's largest internet companies and the leading search provider in Russia, today announces that its Board of Directors has approved targeted amendments to the company’s corporate governance structure, as it seeks to respond to an evolving regulatory environment while supporting the company’s business interests and the interests of all its stakeholders. The proposed amendments will be subject to shareholder approval at a Meeting of Class A Shareholders and an Extraordinary General Meeting of Shareholders, both scheduled to take place on December 20, 2019.