The bill on the localization of cars in taxis threatens to reduce the number of market participants

A bill being considered in the State Duma to give regions the right to introduce requirements for the localization of cars in taxis threatens to reduce the number of participants in this market, industry associations warn. Businesses are asking the government to make an exception for the self-employed and small taxi companies, as well as to provide state support measures. Some automakers are confident in the need for the bill as a measure to protect the taxi market from sanctions, while others warn about the risks of excessively high localization requirements.

The Public Council for Taxi Development (bringing together representatives of market participants from 70 regions) asked Deputy Prime Minister Dmitry Grigorenko to weaken part of the provisions of the bill on the localization of cars in taxis. Kommersant has a copy of the appeal dated February 5. The government press service confirmed receipt of the letter.

The bill, which gives regions the right to introduce requirements for the level of localization of cars in taxis, was developed by the head of the Federation Council Committee on Economic Policy, Andrei Kutepov, and the head of the State Duma Committee on Industry and Trade, Vladimir Gutenev. The document was adopted by the State Duma in the first reading on January 18. The localization indicator should be measured in points for operations and components, similar to the standards for admission to government procurement. The requirements should not apply to cars already used in taxis. According to the authors, the adoption of the bill will create an additional sales market for Russian car manufacturers with a volume of about 100 thousand cars per year.

The Public Council requests that self-employed drivers and taxi companies with fewer than ten vehicles be excluded from the requirements. “A significant narrowing of the choice of model range will lead to their refusal to work in the industry,” the appeal says. In addition, the authors of the letter propose to provide state support measures for taxi companies. Chairman of the Council Irina Zaripova points out that due to the rise in the cost of loans, companies will not be able to cope with the costs of re-equipping infrastructure and purchasing machines. Now taxi companies give preference to foreign cars and have the infrastructure to service such cars, stocks of auto parts and materials, she points out.

The Maxim service points out that, unlike Moscow, in other regions there are no subsidies for updating cars and 98-100% of transportation is actually carried out by the self-employed using personal transport. Yandex Taxi stated that the taxi fleets connected to the service already primarily consist of localized cars. But the influx of new cars lags behind the figures of previous years, and excessive requirements will lead to an additional decrease in supply, an increase in travel prices, and will also stop the influx of self-employed people into the industry, the service warns.

AvtoVAZ supports the bill on the localization of taxi vehicles in its current form, noting that “the taxi infrastructure in each region must be resistant to sanctions pressure.” The concern points out that owning a localized car is cheaper than an imported one, sales of Lada to taxi companies are constant, and AvtoVAZ’s capacity can satisfy almost any fluctuations in demand. Motorinvest, which produces Evolute electric cars, says that the use of localized cars in taxis will make the assembly process within the country more attractive. But, the company notes, there are brands that have organized production in Russia quite recently, for which achieving a high level of localization, for example 4 thousand points, will not be so easy. Managing Director of Citymobil and Taxovichkof Dmitry Kovalenko adds that new manufacturers still need time to set up supply channels.

According to a survey by the Public Council for Taxi Development, the share of cars older than five years in taxis in Russia in 2023 increased from 12% to 17%, which the organization explains by the shortage of new cars, rising prices, and rising costs of loans and leasing. The founder of the transport company GTK-Holding, Said Zaliev, says that the main problem of taxis is the high cost of cars and the rate of growth of tariffs that is insufficient to cover these costs, so subsidies could be a “point of growth.” According to Yandex Taxi, the average cost per minute of a taxi trip in Moscow and the Moscow region from December 2022 to November 2023 increased by 19%. The average price of a new car in Russia in 2023, according to Autostat, exceeded 3 million rubles, which is twice as much as in 2019.

Alina Savitskaya, Olga Nikitina