Why Ukrainian taxi is a "random roulette"

Author : Olena Holubyeva

Source : 112 Ukraine

95% of taxis in Ukraine work illegally
16:21, 17 November 2017

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Before Yandex and Uber taxi services appeared in Kyiv, there were about 400 taxi services. Now their number has halved, head of the board of the All-Ukrainian public organization "Ukrainian Taxi Association" (UTA) Andriy Antonyuk said. According to UTA estimates, now Uber and Uklon taxis, the most recognizable Internet applications, account for about 30-40% of total traffic in Ukraine’s capital. The largest companies of the classical taxi have already set up Internet orders, such as Elite Taxi, but it is less popular - the company's share does not exceed 2-3%. Another one percent of taxi market belongs to "Oksi" (electric vehicles) and "Express". All other services are less than 1%.

At the same time, the Internet application is expensive. The price of such an application, according to Antonyuk, is more than 50 thousand USD. But it is not enough to buy it, you should also hire IT specialists who will support its work, adapt to the release of new gadgets. Such investments are far from everyone's strength. For this reason, most of the old-fashioned services exist on the so-called platforms-order databases that are received via telephone. Orders are sent to taxi cars that are connected to the server. The server earns 1% on the commission received from drivers. Also, the dispatching gets at least 10% commission. This type of work often leads to the fact that the passenger might call a taxi can for an hour, but nobody comes to pick him.

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Uber and Uklon are the most recognizable and popular online taxi ordering platforms in Ukraine. Before Yandex fell under the influence of sanctions in Ukraine, Yandex-taxi could be considered popular too. As you know, Uber and Yandex-taxi are a united company in the CIS, which unites services in Russia, Armenia, Azerbaijan, Georgia, Kazakhstan, and Belarus. Ukraine is an exception. After Yandex stopped working in Ukraine after sanctions, Yandex-taxi continued its working. The company's principle of operation was as follows: for a certain commission, it gave drivers the opportunity to use its program for receiving and processing of online orders, and, as in the case of Uber, drivers could connect to the server remotely. Now the company is working with drivers with a zero commission, but at the same time, the number of orders for its services fell significantly: you have to install VPN to order Yandex taxi through a smartphone in Kyiv. It is also impossible to use Yandex-taxi without a VPN service.

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Earnings of drivers depends on the number of hours they spend on work - after all the driver can decide on how much he can work and choose a flexible schedule for himself. "Among the Uber drivers, there are drivers for whom this work is the main source of income, they work full time and, as a rule, do not miss orders, such drivers earn more than 30 thousand UAH a month," Uberdrive states.

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Carrying Uber sticker on the car is also an opportunity for drivers to earn. A driver who wants to receive an additional charge for the brand's car obtains the sticker – 38 USD per month in Kyiv. If there are less trips, then the driver will not receive an additional payment and will carry advertising free of charge.

Uberdrive acknowledges that Uber partners compete with each other for drivers who will work on them, while demping with a commission. Some reduce their commission to 5-6% of the trip. Uberdrive notes that such a low commission does not allow companies to develop any additional services, and they offer drivers a package of additional features. "We are developing a program of caring for our drivers: it is a complex of possibilities. We offer life insurance and health insurance, visiting sports halls, studying foreign languages, the largest discounts on fuel, washing, service stations," told Serhiy Shevchenko.

Uber's partners connect hundreds of drivers remotely, do not control their condition and cannot guarantee that the driver has not drunk alcohol before the trip.

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Uber allows a passenger to adjust the price of a trip offered by an application-both to reduce it and increase it. In the case of Uber, the car will definitely come to pick you up, but until the end of the trip even the driver may not know the final price for it. At the same time, during peak hours (increased demand), the coefficients are applied to the sum, because of which the cost of the trip along the route may differ from a similar trip at another time. The recalculation of the cost can be applied at the end of the trip, if the duration or distance of the trip is significantly different from the originally calculated ones.

Uklon is a Ukrainian taxi service that accepts orders using an online application. Its owner and founder is Vitaly Dyatlenko. The company’s press service reported that Dyatlenko created an idea to register Uklon as a company. Initially, the idea of the service was simple – to eliminate dispatcher from the taxi order chain: the passenger independently enters the data into the order form.

The press service of Uklon said that they work with regular partners, drivers: "We have IDS partners (information and dispatch services) that work not only with us. This is an important category, especially in the regions, and these are also thousands of cars. We have a small own park for the corporate sector, there are dozens of cars."

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Uklon press service assures that every driver passes a personal interview, and the company's employees inspect his vehicle: "One of the requirements for working in our service is to have a good, clean car."

"95% of taxis in Ukraine work illegally. That is, only 5 taxis out of 100 work in the legal field: they pay taxes, insure passengers, are responsible for the condition of vehicles and drivers. Only in 5 cars out of 100 passengers can require seat belts in the back seat or child car seat. Only 5 cars out of 100 passengers are insured," Minister of Infrastructure Omelyan notes.

Tax revenues from the provision of "taxi services" in 2013 amounted to 1,5 million USD, in 2014 - 1.1 million USD, in 2015 - 1 million USD, and in 2016 - almost returned to the level of 2013 – 1,4 million USD. At the same time, according to UTA, the full potential of tax revenues from the taxi market in Ukraine, even with a simplified taxation system, is at least 135 million USD per year.

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The association says that about 250 thousand cars are involved in the area of taxi transportation in Ukraine, about 30 thousand of which work in Kyiv. At the same time, up to 1% of carriers are registered as legal sole proprietor (including self-employed), as legal taxis and legal entities - up to 0,1%. 99% of the drivers who work in a taxi are individuals who are not registered anywhere (some are still receiving unemployment benefits, subsidies, etc.). The situation with the dispatch services is even worse, they are intermediaries between information servers. As the subjects of management that provide information services, no more than 1% of them are registered, the remaining 99% work illegally and are not even listed in the register of legal entities.

In October, Minister Omelyan said that the Ministry of Infrastructure of Ukraine is developing a draft government resolution that provides for using of special number plates for taxi cars (for example, "yellow number plates"). At the same time, Omelyan stressed that this can only happen on a voluntary basis.

The driver is responsible for the consequences of driving under the law. Therefore, if the fault of the driver caused damage, he himself must compensate. If this type of liability is insured, it can alleviate this responsibility, Uberdrive states: "In case of an accident, our company provides legal assistance to drivers. We have a special accident lawyer, he is always in touch and can help correctly resolve the situations." However, not all companies have even a lawyer, as well as insurance.

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In addition to the idea voiced by Minister Omelyan to legalize the taxi market by changing the color of license plates, there is still only one single legislative initiative for the regulation of the situation in the taxi market in Ukraine - bill No. 3107.

The text of the document presupposes the transfer of the right to issue licenses for passenger transportation services to local authorities. Legislative introduction of such definitions as "organizer of transportation by taxi", "information-dispatch service" and "transportation by taxi" is also envisaged.

The bill supposes the addition of the Code of Ukraine on Administrative Offenses and the Law of Ukraine "On Road Transport" with the rules regarding liability for violation of the procedure for the carriage of passengers. In addition, an penalties for violation of the law on taxi transportation would be increased.

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