The reasons and consequences of the introduction of new, and in fact old, rules in taxis

The upcoming introduction of strict rules in the passenger transportation sector of Azerbaijan, scheduled for July 1, is a response to the growing demands of the public to restore order in the industry. The protests, often heard in the press, have increased concerns about the proliferation of outdated hybrid passenger vehicles, which has led to a sharp increase in the number of taxi services that lack standards of safety and comfort for passengers.

The catalyst for these large-scale reforms was not only the influx of outdated vehicles, but also a depressing decline in the behavior and professionalism of drivers, marked by cases of rudeness and disregard for the well-being of passengers. A particularly egregious incident that shocked the consciousness of society was the brutal murder of 25-year-old Ahmed Ahmedov and members of his family in February. The investigation revealed that the criminal, suffering from a mental illness, was engaged in passenger transportation as a source of income, using his personal car for this purpose.

The need to review the regulatory framework is becoming apparent against the background of public concern and tragic incidents. As Azerbaijan strives to raise standards and ensure passenger safety and satisfaction, the upcoming regulations are aimed at solving numerous problems in the transport sector.

One of the pressing problems is the proliferation of outdated hybrid vehicles, which not only endanger the safety of passengers, but also contribute to environmental degradation. According to the latest data from the Ministry of Transport, the number of hybrid passenger cars in operation has increased by 30% over the past two years, which has led to an increase in traffic jams and pollution levels in urban centers.

AYNA plays by her own rules

The upcoming introduction of new rules governing the use of passenger cars in the taxi industry promises to strengthen driver supervision, raise standards of safety and comfort in vehicles and improve the well-being of passengers. The main of these requirements is the mandatory compliance with the environmental standard for exhaust gases Euro-5, aimed at reducing air pollution and increasing environmental sustainability.

While these rules portend positive developments towards a safer and more regulated transport landscape, their implementation also poses challenges for both transport workers and regulators. The main challenge is to meet these challenges without compromising the well-being of passengers or the livelihood of drivers, and thereby ensure continued public confidence in the taxi industry.

During a frank conversation between the author of this article and a local taxi driver, it became obvious that the Land Transport Agency (AYNA) in September put into effect a directive ordering taxi drivers to take professional courses followed by rigorous exams. Successful completion of these assessments is completed with the issuance of an electronic certificate, which is subsequently uploaded to a centralized database for verification.

However, meeting these training requirements involves high financial and logistical costs for taxi drivers. According to the interviewed driver, professional courses entail financial costs in the amount of 70 manats per week, in addition to a fee exceeding 100 manats for the right to work as a taxi driver. Moreover, drivers are required to take these courses annually, which creates a constant financial burden that many consider unbearable.

The impact of these financial obligations on taxi workers is palpable, as it is reported that an increasing number of drivers are leaving the profession due to the increasing costs associated with compliance with legal requirements. This massive outflow of drivers threatens to exacerbate existing problems in the transport sector, including driver shortages and service disruptions, potentially undermining the accessibility and reliability of taxi services for passengers.

In light of these developments, AYNA's statement on the mandatory nature of training courses and exams underscores the intent of regulators behind these measures. However, the discrepancy between regulatory requirements and the practical problems faced by taxi drivers highlights the need for a subtle implementation approach that balances regulatory requirements with considerations of economic viability and social equity.

Moving forward, shareholders should engage in a constructive dialogue to address the concerns raised by taxi drivers while achieving common goals of improving safety, environmental sustainability and passenger well-being. This requires the joint efforts of regulators, industry representatives and civil society stakeholders to identify viable solutions that mitigate the negative impact of regulatory compliance on drivers while achieving the broader goals of transport reform.

For three months? They won 't make it in time

Automotive expert Tural Yusifov emphasizes the potential both positive and negative impact of these measures in connection with the upcoming introduction of new rules governing the activities of the taxi industry in Azerbaijan. Among the expected results is a likely increase in passenger fares associated with a reduction in the number of available taxis and the introduction of stricter operating standards. According to Yusifov, such a reduction in supply may lead to an increase in maintenance costs, which will allow drivers to potentially earn higher incomes in accordance with market dynamics.

However, concerns remain about whether drivers will be able to cope with the increased production costs caused by the new rules, which will come into force in just three months, by July 1. Industry expert Yasin Mustafayev warns that a significant part of taxi drivers may have difficulty meeting stringent requirements, including repainting vehicles, installing mail terminals for online payment and integrating video surveillance systems into the interiors of salons. The huge cost of these upgrades, combined with the sheer number of vehicles subject to the requirements, presents a major obstacle for many drivers.

Mustafayev believes that the approaching deadline for fulfilling the requirements may require an extension, since drivers face logistical and financial difficulties in meeting regulatory requirements. The potential consequences of non-compliance are very serious, and the famous purple London taxis are in danger of disappearing from routes due to the ban on the use of vehicles with a service life exceeding 15 years.

Further complicating the situation are concerns expressed by Osman Gunduz, President of the non-governmental organization Multimedia, regarding the implications for privacy and data security associated with mandatory video recording in taxi cabs. Gunduz questions the effectiveness of measures aimed at protecting passenger information, especially in light of the potential for deliberate dissemination of confidential video materials on social media platforms. Due to the fact that there are many well-known personalities among people coming to work, concerns about privacy violations and reputational risks are increasing, which underlines the need for reliable data protection protocols.

In addition, Gunduz emphasizes the absence of scientific justification underlying the mandatory red and yellow color scheme for taxis and buses. Although the advantages of yellow vehicles in terms of visibility at night have been documented, the reasons for the introduction of red shades remain unclear, raising questions about scientifically sound regulatory decisions.

In response to these concerns, we draw attention to the practice in other megacities of the world, such as New York, where the rules for working with taxis include provisions that allow you to visually indicate the presence of video surveillance systems in vehicles. This precedent highlights the importance of transparent communication and proactive measures to address privacy concerns while ensuring regulatory compliance.

40 thousand people will be out of work

The Azerbaijan Road Transport Agency (AYNA) has refuted the concerns of drivers and the public about the upcoming changes in legislation in the taxi sector, citing the need to solve the problem of oversaturation of the Baku transport system with vehicles. Anar Rzayev, Chairman of the Board of AYNA, highlighted the staggering abundance of taxis operating in the city, explaining this by the high availability of services.

Rzayev's remarks shed light on the sharp difference in taxi density between Baku and major global megacities, showing that the number of taxis per thousand people in Baku is four times higher than in cities such as London, Moscow, New York, Tokyo, Shanghai and Istanbul. Against the background of overcapacity, AYNA argues that upcoming regulations are necessary to streamline the taxi market and improve the quality of service.

According to statements made by Deputy Minister of Digital Development and Transport Rahman Hummatov at a public hearing in a parliamentary committee, there has already been a noticeable decrease in the number of private vehicles engaged in passenger transportation since the summer, indicating an initial reaction to regulatory signals. Hummatov assured that the introduction of new rules will quickly bring tangible results, reducing fears about possible job loss among drivers.

"Up to 20 thousand taxi units are enough for Baku. The number of cars whose drivers are engaged in private transportation has decreased from 67 thousand to 60 thousand since the summer. This does not mean that up to 40,000 people will be out of work. First of all, there is a serious need for drivers of public transport and trucks for cargo transportation. It should also be noted those who have two jobs. So we will not wait too long. As soon as the rules are adopted, we will immediately begin to see results," Deputy Minister of Digital Development and Transport Rahman Hummatov promised at a public hearing in the parliamentary committee.

However, it should be noted that this is not the first time that Azerbaijan has tried to introduce strict rules in the taxi sector. Back in 2019, regulatory measures were introduced prescribing special requirements for taxis operating in the administrative district of Baku. These requirements related, in particular, to vehicle standards, including the use of passenger cars of class "B" and higher, certain color schemes, the installation of POS terminals and maintenance standards.

Despite the fact that these rules have been in force for more than five years, their compliance remains unclear, which causes skepticism about the effectiveness of the upcoming measures. Similar regulatory initiatives in other cities around the world, such as Moscow's 2013 injunction on yellow and white-yellow colors for taxis and New York's historic adoption of yellow shades to improve visibility, underscore the global importance of such measures.

Moreover, the evolution of taxi regulations in New York, in particular the promotion of the use of electric vehicles with hybrid drive, highlights the need to adapt the regulatory framework to meet modern challenges, including ensuring environmental sustainability.

What is this being done for?

Anar Rzayev, Chairman of the Board of the Azerbaijan Land Transport Agency (AYNA), recently released statistics on the age distribution of taxis operating in Baku, which sheds light on the problems associated with the upcoming changes in the regulation of the industry. According to Rzayev, a staggering 60% of taxis in the capital are vehicles that have been in operation for more than 15 years, and only a minimal part of them fall under the recommended age limits provided for by the new rules.

A breakdown of the taxi fleet shows that cars aged five years make up only 7%, while cars aged 5-10 years make up 10% and cars aged 10-15 years make up 21%. The most alarming is the fact that almost half of taxis – 42% – are cars produced 15-20 years ago, and another 20% have exceeded the 20-year mark. These figures highlight the impracticability of investing in expensive repainting measures provided for by the new rules for a significant proportion of drivers whose vehicles either exceed the age threshold or will become practically obsolete in the next few years.

Economist Natig Jafarli, in an interview with Turan, expressed skepticism about the government's motives behind the legislative changes, suggesting that the true goal may not be to improve the social situation of forced drivers, but to reduce the number of vehicles on the roads. Jafarli argues that the lack of preferential leasing or loan programs to facilitate the purchase of new vehicles suggests a broader agenda aimed at monopolizing the transport sector and maximizing government profits.

In addition, Jafarli points to the potential consolidation of the taxi industry under the control of individual organizations, arguing that strict rules could lead to the dismissal of tens of thousands of independent drivers, which would pave the way for the emergence of new companies offering vehicles on burdensome payment terms. Drawing parallels with past monopolistic practices, Jafarli warns of the detrimental impact on market competition and consumer welfare if such a scenario comes true.

Meanwhile, the prospect of increased production at local car factories gives hope for a solution to the impending shortage of taxi cars. With the potential to produce up to 5,000 units per year, these enterprises could play a key role in mitigating disruptions caused by changes in legislation and in creating employment opportunities in the automotive sector.

However, Jafarli cautions against overly optimistic forecasts, suggesting that the regulatory framework may favor vested interests seeking to benefit from the turmoil in the transport sector. In the face of growing concerns about the weakening of market competition and the potential consolidation of power among individual organizations, stakeholders must remain vigilant to protect the principles of transparency, fairness and consumer choice in the taxi industry of Azerbaijan.