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. Last Updated: 07/27/2016

Gridlock Is Costing Moscow Dearly

MTCars standing in a traffic jam on the Garden Ring. Congestion is hampering competitiveness and economic growth to the tune of billions of dollars.
Editor's note: This is the first of four reports about Moscow traffic jams.

Grigory Zaiko, a company driver, sat wilted behind the steering wheel as his black Volga car jerked forward on Shchyolkovskoye Shosse.

The trip from northeast Moscow to his workplace on Ryazansky Prospekt in the southeast usually took 20 minutes. Today it lasted six hours.

"I crawled along at a pace of about 200 meters every two hours," Zaiko said after he finally arrived at Istochnik Dolgoletia, a local producer of BioAstin cosmetics and medicated cream.

"I'm a company driver, so I cannot just dump my car," he said. "I have to continue burning time and money."

Quantifying the economic cost of the city's growing traffic jams is impossible. What's clear, though, is that the jams are hampering competitiveness and economic growth to the tune of billions of dollars per year.

Today, there are 3 million cars in Moscow. Every day, about 300,000 of those clog the narrow arteries and streets, the sprawling ring roads, and the highways in and out of the center, according to figures from City Hall's transport and communications department.

Vladimir Chichenkov, a 58-year-old businessman who owns a chain of spare-parts shops, said driving to his office on Leningradsky Prospekt every morning eats deeply into his profit margin.

"I'm burning a lot of fuel sitting here," Chichenkov said. "You don't want to turn off the ignition because you don't know when next you'll need to move forward."

Other world capitals like New York, London and Beijing also struggle with traffic, but Moscow's problems are different due to the city's circular transit network. Unlike New York, which is built on a grid pattern, Moscow is encircled by four ring roads -- the Boulevard Ring, the Garden Ring, the Third Ring and the Moscow Ring Road -- and the super-charged center of commerce is entrenched within the innermost ring.

During most of the day, slow-moving traffic or gridlock makes it costly if not impossible to crisscross any of the ring roads to reach the vital city center.

"Traffic jams are also the main factor that determines where businesspeople, especially foreigners, live and work in Moscow," said Albina Yakushenkova, a representative of Beatrix Executive Relocations, which helps businesspeople find housing.

She advises clients to live within walking distance of their offices. "This, of course, means that they have to pay more, but convenience has its own price," she said.

City Hall does not keep statistics on the economic cost of traffic jams, but businesses and other experts believe the combined cost for businesses in lost productivity and revenues runs into the billions of dollars every year.

Companies lose out because workers arrive in the office late and in foul moods after spending hours stuck in traffic.

"Most of those who drive to work are in the middle class," said Vladimir Semyonov, human resources manager for Ipsilon-S, which imports cashew nuts and cocoa beans for chocolate makers. "Being stuck in traffic is not just a financial loss to them, it affects their attitude toward work as well."

Semyonov said it is impossible to expect high productivity from a stressed-out worker.

Industries that are the hardest-hit by traffic jams include manufacturing and wholesale trade, where the timely delivery of freight determines the viability of a business.

"Most farm and food products that are sold in Moscow markets are delivered in the early hours of the morning to avoid the daytime choke points around Moscow," said Viktor Pivovarov, a refrigerator truck driver at the Dorogomilovsky market.

Pivovarov said meat and seafood are particularly delicate, and extra steps are taken to deliver them before the business day starts.

Service providers are also feeling the pinch. "Moscow traffic jams are the worst enemy of businesspeople," said Margarita Chestova, an administrator at New Yellow Taxi, the largest taxi operator in the city.

Chestova said the free flow of traffic was a prerequisite for the success of any taxi company, because taximeters run wild in traffic jams, forcing clients to pay more than they expected. "Most of our business customers have learned how to bypass traffic jams: They make sure their taxis are dispatched far ahead of time," Chestova said.

Making matters worse is the lack of downtown parking, which has turned roadsides and sidewalks into one vast parking lot. About 30 percent of streets that should be free to traffic is blocked by improperly parked cars, said Maria Protsenko, spokeswoman for the city's transport and communications department.

The city spends "a huge amount of money to clear major highways of improperly parked cars," said Vaira Kitinova, spokeswoman for the city's vehicle evacuation department.

"We evacuate about 700 vehicles per day, and the Moscow government bears the cost of moving and parking for the first 24 hours," she said, without providing precise figures for the cost.

Western-owned businesses have started moving their offices to business parks on the outskirts of the city, partly because of the high overhead costs that result from traffic jams. Among the companies now located on the edge of the city are Volvo, BMW and Metro Cash and Carry.

Some real estate developers are even building residential housing inside the business parks, including the new Greenwood Business Park between Leningradskoye and Volokolamskoye shosses near the Moscow Ring Road, said Maxim Zhulikov, a consultant with Knight Frank.

Traffic congestion is not all bad for business, however. Some enterprising Muscovites have found a niche offering information about how to avoid the jams, including Smilink, which charges 200 rubles a month to send the information about any area of town to a mobile phone, desktop or pocket computer.

Yandex, a leading Internet portal, found demand so high for information about traffic jams that it recently teamed up with Smilink to provide it.

Since Russian-made cars are notorious for spewing steam and green liquid when stuck in traffic, jams may actually increase demand for better-quality cars that are more resilient in gridlock and burn less gasoline.

Mobile phone operators, however, are the indisputable winners. People tend to use their mobile phones more while stuck in traffic.

"During peak hours on working days, we observe an increased level of phone use, suggesting that many people stuck in traffic jams find conversation a way to while away the time," said Irina Osadchaya, spokeswoman for Mobile TeleSystems, Moscow's leading mobile phone operator.

That is little consolation for a German businessman who recently arrived in town for a business meeting. The flight from Frankfurt: three hours and 30 minutes. The taxi ride from Sheremetyevo Airport to his destination on Varshavskoye Shosse in southern Moscow: eight hours.

"He was furious," said his taxi driver, who works for Formula Taxi. "He didn't look like he wanted to come back to Moscow again if he could help it."