Russia's Citymobil sees rapid growth in delivery business amid pandemic

MOSCOW, Dec 30 (Reuters) - Russian ride-hailing app Citymobil expects rapid growth of its new express delivery service next year, boosted by the coronavirus pandemic, its chief operating officer Vitaly Bedarev told Reuters.

Citymobil, part of a joint venture between internet group Mail.Ru and state-owned Sberbank, is the second-largest player on the Russian ride-hailing market, behind Yandex.Taxi. It launched the express delivery service in April to offset a slump in taxi rides due to lockdown.

“And if it had not been for the pandemic, I think we would not have launched delivery in 2020,” Bedarev said.

Bedarev said that delivery now accounts for less than 5% of total rides by Citymobil, but the number of delivery orders is growing faster than the number of taxi rides. Orders are delivered not only by taxi drivers but also by delivery staff, Bedarev said.

“Next year, if we maintain high growth rates and implement all our plans, the delivery segment may reach more than 10%. It can be close to 20%. In the more distant future potentially, certainly not in 2021, delivery service could be a larger market than taxis,” he said.

Citymobil is now delivering around 20,000 orders on peak days.

That is still a fraction of the share held by ride-hailing market leader Yandex.Taxi, owned by Russian internet giant Yandex, which has been operating a delivery service since 2019. Yandex says delivery orders surged 13 times from March to November, exceeding 1 million per week.

Citymobil plans to organically grow its core taxi service and YouDrive car-sharing next year, with no plans to enter foreign markets. It expects positive earnings before interest, taxes, depreciation and amortization by end-2022, Bedarev said. (Reporting by Nadezhda Tsydenova, Gleb Stolyarov in Moscow Writing by Vladimir Sadykov in Gdansk Editing by Katya Golubkova)