Drivers shift to the "driver-rental-car service" system.
In Russia, ride-hailing services, predominantly operated by self-employed drivers, have started transitioning away from the traditional taxi moniker towards other modes of transportation. One of the leading aggregators, "Maxim," which controls around 70% of the legal private car market in the regions, has announced a shift towards a vehicle rental with driver scheme, which falls outside the purview of the current taxi legislation.
Maxim's director, Shusharin, is confident that the existing law does not adequately consider the interests of drivers transporting passengers in their personal vehicles. If drivers are caught working without periodic health and vehicle inspections, penalties range from 30,000 to 50,000 rubles. If drivers refuse the taxi license, sanctions range from 500 to 2,000 rubles.
To keep driver-employees within the legal framework, Maxim has adopted the "vehicle rental with driver" business model, commonly known as ridesharing or chauffeur-driven car rental internationally.
Experts verify that the taxi sector is embracing the ridesharing model. Ivan Litvinov, head of the Self-Employment Alliance in Russia, believes individual drivers, estimated to number around 2.5 million in the country, should be subject to separate regulation to avoid labeling them as taxi services.
The proposed regulations for driver-partners include the registration of self-employment, payment of a professional income tax, a clean criminal record, absence of alcohol and drug addiction, and no mandatory requirements regarding vehicle color, daily inspections, travel permits, or additional insurance. However, access to orders should only be through aggregators.
As of now, according to Sergei Korneev, head of the Association of Digital Platform Users, only 3% of taxi drivers nationwide pass regular medical and technical inspections due to limited availability. Around 75% of transportation is provided by drivers classified in the "gray" zone due to excessive regulation.
Earlier reports suggested that 80% of self-employed taxi drivers declined switching to domestic vehicles. By 2027, the Sverdlovsk region will face a shortage of approximately 70,000 drivers. Once the localization taxi law comes into effect, clients will be served by Lada Aura and Haval Jolion vehicles.
The New Taxi Law as Seen by Taxi Drivers
The "Taxi Law," effective September 1, 2023, introduced requirements for taxi drivers to obtain work permits, undergo pre-hire and post-hire medical checks, and perform daily vehicle inspections. The new regulation also bars taxis with criminal records or multiple administrative fines.
From September 1, 2024, drivers must also obtain additional liability insurance and policies for compensation of passengers injured during transportation, substantially increasing costs. To secure such coverage, drivers require a work permit.
This year, the Russian State Duma passed a law mandating taxis to operate exclusively domestic vehicles, effective March 2026. The legislation only allows Russian-made vehicles that meet the localization criteria of over 3,200 points to be used. Current models eligible for this criterion include several Lada variants, Moskvich-3 and Moskvich-6, XCITE X-Cross 7 and X-Cross 8, electric vehicles Evolute i-PRO and i-JOY, among others.
The shift towards vehicle rental with driver models in Russia's ride-hailing sector aims to decrease regulatory and financial burdens. However, it might lead to decreased oversight and variable service standards unless new regulations account for these evolving business practices.
- The news about the shift in Russia's ride-hailing industry towards vehicle rental with driver models, such as ridesharing or chauffeur-driven car rental, is gaining attention in general-news and business sectors.
- Experts in the finance and technology industries are emphasizing the potential impact of the new taxi law on the personal-vehicle transportation sector, particularly the increased costs for drivers due to additional liability insurance and compensation policies for injured passengers.
- Lifestyle magazines are discussing the proposed regulations for driver-partners, highlighting the differences between the current taxi sector and the emerging ridesharing model, and the implications these changes may have on the well-being and financial stability of drivers in the industry.
