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. Last Updated: 07/27/2016

Moscow Looks to Cut Number of Gypsy Taxis

MTA man getting into a gypsy cab on a Moscow street. A city bill aims to bring some regulation to the taxi industry.
The City Duma was to vote on a bill in third and final reading Wednesday aimed at reducing the number of gypsy cabs on the city's streets and boosting the general quality of taxi service.

Industry insiders, however, said the law was unlikely to have much effect other than to drive taxi fares higher.

"The bill is meant to support legal carriers in their competition with illegal carriers," said Stepan Orlov, a United Russia deputy responsible for ushering the bill through the City Duma.

"Gypsy cab drivers who are ready to meet the requirements" are also welcome, he said.

The bill was drafted by the city administration's top transportation official, Leonid Lipsits. Lipsits' office refused to comment on the draft Tuesday.

The bill, a copy of which was posted on the City Duma web site, offers taxi companies and independent drivers a number of perks in exchange for meeting a number of criteria to boost service.

In exchange for meeting the stricter guidelines, taxi companies would receive tax breaks, lower payments on office space rented from the city, free parking in city-owned lots, and access to free advertising.

In return, companies or individual drivers will have to meet a number of standards concerning driver qualifications, vehicle markings and emissions, and customer service levels.

Some of the requirements for drivers include that they have held their license for at least three years, have passed Russian language and city knowledge tests, and have undergone regular medical and psychiatric examinations.

As for the taxis themselves, they will have to be left-hand drive, meet Euro 2 emissions standards and carry a taxi sign. The cars will also have to be equipped with a meter that is able to provide receipts and information about the driver and company inside.

Companies and drivers meeting the requirements will be registered by the city and provided with a Moscow city taxi sign.

Drivers caught using the sign illegally will be fined from $970 to $2,400, while the fine for companies breaking the law will be from $9,700 to $48,620.

Taxi drivers operating without registering officially as commercial entities currently face fines of up to $12,690 or up to 6 months in prison, although the law is almost never enforced. Individuals running unregistered taxi companies face fines as high as $21,000 or prison terms of up to five years.

A special inspectorate will be created within the city transportation department to enforce the standards, Orlov said.

While the total number of officially registered taxis in the city is less than 5,000, information submitted with the bill put the number of gypsy cabs between 30,000 and 50,000.

The total revenues generated by the sector were estimated in the note at $675 million to $1 billion per year, with illegal taxis accounting for 80 to 90 percent of all business.

Industry insiders said the benefits offered in the bill were unlikely to appeal to many gypsy-cab drivers or to help registered drivers compete with them.

Leonid Olshansky, the vice president of the Movement of Russian Motorists, said the bill was actually more likely to boost demand for gypsy cabs, as the expenses involved in meeting the new requirements "would lead to higher fares in legal taxis.

Communist City Duma Deputy Sergei Nikitin agreed, saying carriers or individuals will be able to earn more by operating illegally.

Orlov agreed but argued that this was not the most important point.

"Of course, it's still more profitable to work illegally, but this is against the law and is punishable," he said.

Svetlana Kosorukova, spokeswoman for Gorodskoye Taxi, said corruption also threatened to undercut the effectiveness of the new law.

"Companies that don't comply with the requirements could simply register illegally and carry Moscow city taxi signs," Kosorukova said, adding that this would undermine consumer trust.

"The customer's experience in dealing with a transportation company will still play the decisive role" in which company they chose, she said.

Kosorukova also said gypsy-cab drivers would have trouble complying with the bill's requirements, citing the Euro 2 emission standards as an example. "Individual [cabbies] drive mostly Russian cars, which don't comply with the standard," she said.

The European Union adopted the Euro 2 standard for passenger vehicles in 1993 and has since moved on to Euro 4.

A gypsy-cab driver waiting for fares at Savyolovsky Station described the perks offered in the bill as "unimportant."

The cabby, Alexander Markozyan, 25, complained that the tax breaks were not laid out specifically in the law. He also said he never used city parking lots and that he would still have to pay for those at airports that he does use.

As for the emissions requirements, Markozyan, an Armenian citizen, described them as "robbery."

"If my car doesn't comply with the standards, all I can do is buy a new one," he said.