NOVOSIBIRSK

by Anton Sazansky

December 2015

Capital of Siberian region

A young and vibrant transportation hub with a favourable business climate

2

NOVOSIBIRSK

1.5m population. 900k employed

City area: 506 sq km

Over 800k registered vehicles

178 registered taxi operators

40k-60k requests – total Daily Demand

9 522 taxi licenses issued

90% of drivers operate without license

Sources: wikipedia, 2gis, ksonline

INCUMBENTS REGISTERED DRIVERS

OWN FLEET CARS CORPORATE CLIENTS BASE FARE FLEXIBLE FARE PAYMENT MOB APP

LEADER / RUTAXI 13 000 n/a n/a $1,54 $0,17 cash yes

GRAND AVTO 11 000 500 300 $2,31 $0,22 cash yes

ATLAS 6 500 n/a n/a $2,46 $0,17 cash yes

CLASSIC 800 50 100 $2,31 $0,15 cash yes

TAXI 102 500 70 50 $2,15 $0,15 cash/ card no

GETT* n/a n/a n/a $0,77 $0,28 cash/card yes

YANDEX TAXI 150 n/a n/a $1,22 $0,25 cash/card yes

Average $1,82 $0,20

Taxi market is dominated by 5 operators with 2 distinct leadersPricing, availability and customer service are the key drivers for demand

Source: nsk.dk.ru

3

70% market share

Competitors are targeting NovosibirskLaunch Uber this Fall to acquire market share and catch Dec-Jan demand surge

4

• Launched in June 2015

• Applied fixed fare of 1.5 USD across the Right Side of the City

• Rapidly gaining popularity in Novosibirsk

• Launched in Sochi, Samara, Rostov, Ekaterinburg and Krasnoyarsk on 7 Oct 15

• Launched on 27 Oct with 150 cars from Grand Avto and RNIC

• Tariff Economy- 79 rub + 16 rub / km

• Tariff Comfort - 195 rub + 17 rub / km (first 2km inc.)

• Planned to launch luxury private driver service this summer

• Currently service is not available in Novosibirsk

TIME min DISTANCE km LEADER GRAND AVTO UBER RUTAXI DIFF GRAND AUTO DIFF

7 2 1,85 2,31 1,27 0,58 0,31 1,04 0,45

11 4 2,00 2,31 1,58 0,42 0,21 0,73 0,32

15 6 2,08 2,46 1,89 0,18 0,09 0,57 0,23

18 7 2,54 2,77 2,10 0,43 0,17 0,66 0,24

21 8 2,77 2,92 2,34 0,43 0,16 0,59 0,20

23 10 2,69 3,08 2,52 0,17 0,06 0,55 0,18

24 13 4,08 4,15 2,76 1,32 0,32 1,39 0,34

35 16 4,15 4,46 3,52 0,64 0,15 0,95 0,21

35 17 4,08 4,62 3,57 0,51 0,12 1,05 0,23

36 12 3,46 3,85 3,35 0,11 0,03 0,49 0,13

36 14 3,54 3,85 3,46 0,08 0,02 0,38 0,10

39 19 4,85 5,38 3,89 0,95 0,20 1,49 0,28

46 25 5,77 6,00 4,59 1,18 0,20 1,41 0,23

Ave $3,37 $3,70 $2,83 $0,54 16% $0,87 24%

WED 16:22 TRAFFIC: 4 POINTS

Launch UberX at 0.77 USD base + 0.05 USD km/minBuy market share by pricing 15-25% below competitors

Sources: Yandex maps, Leaader and GA mob apps5

FARES Oct Nov Dec Jan Feb Mar

Flexible RUB RUB3,50 RUB3,50 RUB4,00 RUB4,00 RUB4,00 RUB4,00

Flexible USD $0,05 $0,05 $0,06 $0,06 $0,06 $0,06

*Ave. UBER fare RUB

RUB184 RUB184 RUB203 RUB203 RUB203 RUB203

*Ave. UBER fare USD $2,83 $2,83 $3,13 $3,13 $3,13 $3,13

6

Launch with 2 months promo fare to buy market share

* Excluding surge pricing

TOTAL DEMAND AVE Day Week Month

REQUESTS 000 47 320 1 280

TOTAL DEMAND Mon Tue Wed Thus Fri Sat Sun TOTAL

REQUESTS 000 35 40 40 45 60 55 45 320

Total demand for cab service is 40k-60k requests / day

7

UBER REQUESTS

DEMAND ACQUISITION TARGETS 6m 12m 36m

TIME 10% 17% 31%7-9 am 279 474 865

9-5 pm 1 579 2 684 4 895

5-7 pm 376 639 1 166

7-11 pm 1 153 1 960 3 574

11-1 am 924 1 571 2 864

1-7 am 389 661 1 206

REQUESTS / DAY 4 700 7 990 14 570

REQUESTS 000 / MONTH 132 224 408

Generate 51k Sign ups to achieve 6m demand aquisition target

8

SIGN UPS ESTIMATION 6m

Rides / month 1 3 7 10

*Total users % 54% 29% 14% 3%

*Total requests % 22% 26% 32% 20% TOTAL

UBER #Sign Ups 000 29 16 6 1 51

Total taxi users 000 282 151 73 16 521

* Yandex Taxi usage pattern Moscow 2013

SIGN UPS GENERATION 6M Oct Nov Dec Jan Feb Mar

Sign Ups % / month 6% 12% 26% 22% 18% 16%

Sign Ups 000 / month 3 6 13 11 9 8

UTILISATION trips / 1hr 1,2 1,2 1,4 1,4 1,3 1,3

FULL TIME 6 days/week - 12 hrs/day

Oct Nov Dec Jan Feb Mar

% of all Drivers 40% 43% 47% 50% 53% 57%Trips / day 14 14 17 17 16 16Peak trips/day 7 7 9 9 8 8Off peak trips/day 7 7 8 8 8 8

PART TIME 4 days/week - 6 hrs/day Oct Nov Dec Jan Feb Mar

% of all Drivers 60% 57% 53% 50% 47% 43%Trips / day 7 7 8 8 8 8Peak trips/day 4 4 4 4 4 4Off peak trips/day 3 3 4 4 4 4

DRIVER BONUS Oct Nov Dec Jan Feb Mar

Peak bonus /trip USD $1,54 $1,54 $1,08 $1,08 $0,92 $0,92Off Peak bonus /trip USD $0,46 $0,46 $0,31 $0,31 $0,23 $0,23

SUPPLY Oct Nov Dec Jan Feb Mar

New Drivers / week 10 17 21 24 26 28

Onboarding drivers and estimating their work schedules

9

FREE RIDES ESTIMATION Oct Nov Dec Jan Feb Mar

TOTAL COMPLETED 000 7 18 41 65 86 116

* FREE RIDES (ave 36 %) 63% 51% 39% 27% 21% 15%

* FREE RIDES 000 4,2 9,3 16,0 17,5 18,0 17,4

FREE RIDE COST usd/trip $3,85 $3,08 $2,31 $2,31 $2,31 $2,31

Free ride should gradually decrease over time period

10

Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 TotalWeek 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 6m

DRIVERS 20 30 40 50 67 84 101 118 139 160 181 202 226 250 274 298 324 350 376 402 430 458 486 514 514

DRIVER CHURN 8% 2 2 3 4 5 7 8 9 11 13 14 16 18 20 22 24 26 28 30 32 34 37 39 41 Target

TRIPS (000) 1,0 1,4 1,9 2,4 3,3 4,1 5,0 5,8 8,3 9,6 10,9 12,1 14,0 15,5 16,9 18,4 19,2 20,7 22,2 23,8 26,4 28,1 29,9 31,6 10%

(000 USD)

GROSS REVENUE 3 4 5 7 9 12 14 16 26 30 34 38 44 48 53 58 60 65 70 74 83 88 93 99 $1 033

Uber split 20% 0,5 0,8 1,1 1,4 1,9 2,3 2,8 3,3 5,2 6,0 6,8 7,6 8,7 9,7 10,6 11,5 12,0 13,0 13,9 14,9 16,5 17,6 18,7 19,8 $206,63* Surge split 20% 0,1 0,2 0,2 0,3 0,4 0,5 0,6 0,7 1,2 1,4 1,6 1,7 2,0 2,2 2,4 2,6 2,7 2,9 3,1 3,3 3,7 3,9 4,1 4,4 $46,28

NET REVENUE 1 1 1 2 2 3 3 4 6 7 8 9 11 12 13 14 15 16 17 18 20 22 23 24 $253

COST OF SALES 3 5 7 8 9 11 13 15 13 15 18 20 19 21 23 25 20 22 24 25 25 26 28 29 $422

Free Rides Cost 2 3 5 6 5 6 8 9 8 9 10 11 9 10 11 11 9 10 11 12 9 10 10 11 $204Driver Bonus 1 1 2 2 3 4 5 6 6 7 8 9 10 11 12 13 11 12 13 14 15 16 17 18 $218

GROSS MARGIN - 3 - 4 - 5 - 7 - 6 - 8 - 9 - 11 - 7 - 8 - 9 - 10 - 8 - 9 - 10 - 10 - 6 - 6 - 7 - 7 - 4 - 5 - 5 - 5 -$169S&M 4 4 4 4 4 4 4 4 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 $72

G&A 3 3 3 3 3 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 $56

EBIT - 10 - 11 - 12 - 14 - 13 - 15 - 16 - 18 - 12 - 13 - 14 - 15 - 13 - 14 - 15 - 15 - 10 - 10 - 11 - 11 - 8 - 9 - 9 - 9 -$297

6m Weekly Earnings Forecast

*Average surge rate taken as 40%11

6 770 registered Sole Traders (ST) account for less than

10% all drivers in the City

Shadow drivers push out licensed taxis from the street Physical threats and property damage are not uncommon

City is split into sectors by shadow drivers’ controlling groups

Licensed drivers attracted to going back into shadow to reduce costs and tax payments

Uber brings transparency and safety to City transportation

system

Absence of regulatory oversight provides no incentive for drivers

Around 90% of City drivers operate without taxi license

12

Current Legislation Proposed Legislation

76 USD fine for not having a license

Mobile platforms are not covered

Lack of control over law execution

Does not mandate drivers to obtain licenses

460 USD fine for not having a license

Mobile platforms classified as “telecom services” Responsibility for obtaining license put on drivers

Does mandate drivers to obtain licenses

Lack of regulation provides scaling opportunities for UberProposed legislation to tackle shadow drivers due for government review this Fall

13

Drivers and Riders safety

Drivers may be assaulted by criminal elements controlling major transportation hubs.

Introduce driver emergency button. Driver screening and background checks.

Taxi licencePolice raids aimed at shadow drivers. Fines and driving license confiscations.

Oblige new drivers to obtain permits via Uber partners. Assist drivers in obtaining license.

Taxi lobby push back

Fiscal, antimonopoly and police checks on Uber Taxi lobby may adopt collusion policy.

Educate policymakers about Uber business model and vision. Implement “too big to fail strategy”.

Unclear legal framework

New laws may be introduced to put more pressure on Uber.

Collaborate with Mininstry of Transport to implement sensible, safety-based ridesharing regulations.

Surge pricing Angry riders

Severe surge pricing may occur due to extreme weather conditions in winter.

Address negative attention via social media channels.

Competitors Imitators

Increasing competition may boost driver churn. Harder to acquire market share from increased competition.

Retain competitive bonuses for drivers. Raise fares or surge pricing. Build community among drivers.

Safety issues and licensing are the biggest challenges

14

Uber

20% split

Customer service

Marketing

S&D management

PR / GR

Product management

Training

Drivers’ examination

Uber Partner Entities

5%-10% split

Source drivers

Licensing

Training

Docs/Background checks

Leasing

Drivers’ examination

Drivers

70%-75% split

Driver services

Car rental agreement

Customer service

Referrals

Uber partners to onboard drivers and provide licensing assistance Motivate full time drivers to become ST and connect directly

15

1. Economic effect: creating new jobs in the City

2. Transport system effectiveness: high density coverage, availability, decreasing congestion

3. Safety: bringing down drink driving

4. Improving ecology: falling traffic congestion

5. Transparency: motivate shadow drivers to ride for Uber and obtain license

Educate city officials about Uber vision and business modelMeet Ministry of Transport and Transport Department of City Administration members

16

Supply scaling

• Taxi forums. Radio. Media.

• Partner with recruitment firms

• Reward full time drivers. Retention bonus.

• Motivate drivers to build career with Uber

• Referral bonus system

• Partner with car leasing companies. Buy out opportunity

17

Demand scaling

• Promote Uber in social media. Instagram, VK, Facebook

• Support local events and celebrations. Opera Theatre, Novosibirsk Expo Centre

• Partner with local HoReCa. Hilton, RosInter, Denis Ivanov, Food Masters

• Engage Uber for Business. City Administration, Sberbank, Beeline, Pharma

• Connect with Academpark. Co-working, Big MOBI Fest

• Celebrity ride. Achieve WOW factor

18

Engage companies into synergetic partnershipsUse high traffic venues to promote Uber

19

CUSTOMERUBER

TELE2

1st Free Ride

SMS with Uber app download link and promo code

Residual amount from 1st

free ride credited to

customer’s TELE2 account

Generate sign ups through synergetic partnership with TELE2

20

Register free business account with Flamp

Flamp emails invitations to its users with Uber

promo codes

Users ride Uber and leave their reviews/comments on Flamp

Users with the best feedback are rewarded

with Uber credits

Partner with Flamp.ru to generate Sign Ups

2 600 000+ visitors per month

21

22

TOO DRUNK TO DRIVE? THE CITY WILL CALL YOU AN UBER

14 Feb – Happy Valentine’s Flowers, chocolates, ice cream

23 Feb – Defender of Fatherland day Free rides for veterans

3 Mar – Pancake week Pancakes, honey, jam

8 Mar – Women day Flowers, chocolates, cosmetics

12 Apr – Cosmonautics day Planetarium tickets Free ride for every 108th rider

12 Apr – Happy Easter Chocolate eggs

9 May – Victory day Free rides for veterans

26 Jun – City day Fixed fare across city center

27 Jun – Youth day Condoms with Uber Logo

30 Oct – Mothers day Pampers, baby care products

31 Dec - Happy New Year Tangerines

Support local celebrations with on demand Uber deliveriesIncrease brand awareness and build a positive reputation

23

SHEREGESH- SIBERIA SKI RESORT -

The most popular ski

and snowboarding resort

in Russia

Over 1 mln visitors

each year

LAUNCH CAMPAIGN

SHEREGESHSiberian ski resort

UberHELI

Welcome to Siberia.

THANK YOU