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Uber, Gett and Bolt can be forced out of Russian internal market

The Russian legislators have decided to regulate the taxi market in Russia. They have drafted and proposed new law on taxi state regulation in Russia. The cruelest provision of this draft law is the restriction of market opportunities for foreign companies, i.e. for taxi aggregators like Uber, Gett and Bolt. Almost everybody knows that the absence of competition leads to market degradation, but the Russian legislators don’t care about it, they believe they can change the laws of economy.

The draft law has been adopted in first reading and for the second reading it was proposed to make it more rigid. There are standard norms, like the taxi services can be provided only by legal entity, and it can be only Russian with Russian capital. So such taxi aggregators like Gett, Yandex Taxi (by Russian internet search company, Russian Google), Uber (works with Yandex Taxi in Russia), Bolt and other similar companies are out of law. It is not good for Russian market because otherwise the prices for taxi services would drastically rise.

Not all legislators like such hard legislative measures. Some of them believe the foreign companies should stay in Russia in order to secure competition in internal market. Most Russian companies have foreign capital. According to the legislator’s logic the taxi services must work and locate in each town and to be under control of local authorities. The rates for taxi services are to be regulated not by the market, but by the Ministry of transport and Federal antitrust service. Taxation authorities would track all transactions of taxi companies in automatic regime.

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