Exodus of Migrant Workers Alters Russia’s Taxi Landscape
Taxi Fares Set to Soar in Russia as Crackdown on Migrants Continues
Last month, the taxi division of Russian tech company Yandex issued a dire warning to both the public and the government: Due to the ongoing crackdown on migrants in Russia, taxi fares are expected to increase significantly.
The concerns raised by Yandex are not unfounded, as the effects of a law on taxi services passed in 2023 are beginning to be felt this fall, with noticeable changes in the market already taking place.
The mass departure of foreign workers, primarily from Central Asia, is impacting various sectors of the Russian economy following a government crackdown on migrants in response to a tragic attack on a concert hall near Moscow in March.
The crackdown, fueled by renewed anti-migrant sentiments after the attack, has resulted in a significant reduction in the number of migrant workers in Russia. This has particularly affected the taxi industry, with many drivers being deported or choosing to leave voluntarily due to stringent new regulations imposed by the government.
One Kyrgyz taxi driver, Ali, highlighted the challenges faced by Central Asian migrants in conforming to the new laws, including the financial burden of meeting new requirements such as insurance payments and car color-coding mandates.
The situation is causing a shortage of drivers, with Yandex Taxi’s government relations chief Anton Petrakov predicting a shortfall of around 130,000 taxi drivers in Russia. This is expected to lead to a sharp increase in taxi fares in the coming years.
In response to the growing crisis, Russian lawmakers are considering amendments to the existing law on taxi services, including potential caps on the commissions charged by aggregator companies like Yandex.
The shortage of migrant workers is not just affecting the taxi industry but also other sectors such as public transport and the restaurant business. Vitaly Efimov, a member of the Duma’s Transport Committee, noted that bus routes were being closed due to a lack of drivers, while restaurant ombudsman Sergei Mironov highlighted the impact on service quality in the hospitality sector.
As debates continue on how to address the growing labor shortage, some are calling for a return to state-owned taxi services reminiscent of the Soviet era. However, others are advocating for the digitization of the industry to streamline processes and combat the rise of underground taxi services.
Overall, the ongoing crackdown on migrants in Russia is having far-reaching implications on various sectors of the economy, with taxi fares set to rise and businesses struggling to cope with the labor shortage. It remains to be seen how policymakers will address these challenges and ensure the sustainability of key industries in the country.
