Taxi operators win round against plans to award routes, while keeping free-ride system
or Oleksandr Omelchenko that they said would have killed competition and created a nontransparent system of awarding routes. But they are still required to provide free rides to thousands of “privileged” passengers each day.
Yaroslav, a company that operates one of the city’s larger fleets of route taxis, known as marshrutkas, filed complaints against the city’s plans with the prosecutor’s office, parliament, the Antimonopoly Committee and other government agencies. It also filed a lawsuit in Kyiv Economic Court on Aug. 15.
The decision by Kyiv prosecutors may stifle city administration plans to end competition on the taxi routes.
When the decision was announced on Sept. 12, word spread quickly through the ranks of the city’s minibus taxi drivers, who shouted congratulatory messages to one another as they passed on the streets.
The taxi operator sought to put a halt to a city plan announced June 21 that would have required taxi operators to participate in a closed tender for the right to operate on particular transit routes. Currently, the taxis are free to operate wherever they choose. The minivans shadow public bus, trolley and tramway routes, charging between 75 kopecks and Hr 1 a seat.
The prosecutor’s office disagreed with the city administration’s assertion that eliminating competition on the routes would improve public transportation. Instead, the plan would give a green light to creation of a private route taxi monopoly and put an end to what Yaroslav officials say is healthy competition. Prosecutors also determined that the city’s plan was unconstitutional.
Officials at the city’s transportation department said that they were drafting a letter to prosecutors urging them to review their decision. The department said it believes that it has authority to award routes using closed tenders.
Mykola Rudababa, deputy head of the city’s transport department, said that the decision to award public mass transit routes to specific route taxi firms was intended to bring order to the city’s transportation system.
But route taxi operators said that they feared that the plan would lead to a redistribution of transport routes in Kyiv, weaken competition and worsen the quality of service.
Though the taxi firms may be allowed to continue to compete for passengers, another city program that requires them to offer free seats to so‑called privileged passengers, including veterans and retirees, will continue through at least year‑end.
On July 16, Omelchenko announced that the city would raise mass transit fares effective Sept. 1, in part to compensate for losses the city was incurring by providing free transportation to so many privileged riders. The subsequent public outcry over the fare increases forced the city to put the hike on hold.
In an apparent attempt to shift the burden from the public transit system to privately operated route taxis, the city decided on Aug. 15 to require the taxis to provide free rides to privileged riders. The city’s program would require the minibuses to set aside 30 percent of their seats to non‑fare‑paying passengers.
Even though the free rides would be restricted to off‑peak hours, between 10 a.m. and 4 p.m. and after 8 p.m., minibus operators said their income and profits would be lower as a result.
“Absolutely all of our drivers are against this new regulation,” said a minibus driver who asked not to be identified. “If we give away 30 per cent of our seats to privileged passengers, each driver will lose Hr 150 a day.”
The driver, who works for one of the smaller route taxi firms, said Yaroslav was big enough to afford to fight the city. Smaller operators, he said, lack Yaroslav’s clout and feel defenseless against the city’s demands.
“It is unlikely that Yaroslav will have supporters openly declaring their views,” he said.
Indeed, city transportation officials said that out of the 67 route taxi firms that operate in the city, Yaroslav is the only company toi have registered a complaint.
Yaroslav Director Mykhaylo Podvysotsky said that it is unlikely that the route taxis would strictly comply with the city’s demand that 30 percent of the seats be offered to passengers seeking a free ride.
“Drivers from other companies call us and express their support. We’ve been fierce competitors, but now we all find ourselves as allies,” said Yaroslav’s trade union leader, Zoya Ovchynnykova.
Yaroslav appeared on the market in 2000 with 250 GAZel minivans. Since then, the company has completely renewed its fleet using bank loans, and today 75 per cent of Yaroslav’s fleet is comprised of Bohdan minivans produced in Cherkasy. The company employs 1,230 people, including 600 drivers and provides service on 26 routes. About 225 vans are on the road every day, carrying 150,000 passengers, the company said.
The city’s Rudobaba said the city estimates that between 7 and 10 percent of all passengers qualify as privileged, and this is not going to affect taxi companies’ profits.
“None of the companies complain except Yaroslav,” Rudobaba said. “On the contrary, they are grateful that they had been given the right to work in Kyiv.”
“I talk to representatives of private companies on almost a daily basis. None of them have said they are losing profit [because they must provide free rides],” he said.
Rudobaba said that a route taxi collects between Hr 180 and Hr 380 in fares every day.
For his part, Podvysotsky said that he doesn’t understand why the city wants to solve government’s problems by shifting the burden to private business. He said that requiring companies to transport certain passengers for free without compensating the carriers is wrong, and that increasing the number of privileged passengers without providing some sort of compensations violates Ukrainian law.
Podvysotsky suggested that the government could provide vouchers to needy passengers, and allow companies to redeem the vouchers for cash once a month.
Rudobaba would not rule out providing some sort of compensation – eventually – but he said that the city does not consider the problem urgent.
For the time being, “we are not going to provide any funds,” he said.
Moreover, he said, there are plenty of companies that would like to get into the route taxi business.
“There is constant demand. Many companies out there would be happy to sign contracts with us.”
The program that requires marshrutkas to carry privileged passengers was due to be evaluated early next month, but the city decided to extend the program through the end of the year to accumulate more information.
“The Kyiv City Administration will decide after that,” Rudobaba said.
