Why is the state invading the taxi market?

Baku/13.06.23/Turan:  During a recent meeting of the Committee on Economic Policy, Industry, and Entrepreneurship of the Milli Majlis, Minister of Digital Development and Transport Rashad Nabiyev expressed concerns about rising prices in the taxi sector following the adoption of a new law. The minister pointed out that Azerbaijan has an unusually high number of taxi companies compared to the rest of the world. He emphasized that the main goal should be to reduce the reliance on taxi rides, as statistics show that the average distance traveled by a taxi is only 1.5-3 km, a distance that could easily be covered by public transport or walking.

The emergence of a new taxi aggregator company in Azerbaijan, which was brought to the country by Pasha Holding, has sparked discussions among the minister, other officials, and deputies on the topic of the taxi market. This has led to speculation about whether the government intends to intervene in a market that is considered one of the few competitive sectors in Azerbaijan and what their objectives might be.

Economist Nazim Beidamirli offered his insights on the situation in the taxi market during an episode of the program "Difficult Question." He criticized the minister's statement about the abundance of taxi companies worldwide, stating that competition and a hands-off approach by the state are key to a country's prosperity. Beidamirli raised important questions regarding the reasons why citizens engage in providing transportation services with their personal vehicles, suggesting that unemployment may be a driving factor. He also questioned the government's plans to address this issue and provide alternative solutions for those involved in the taxi market.

Beidamirli highlighted the relevance of the taxi market topic since Pasha Holding's entry into the industry, questioning why the minister is involved in what appears to be favoritism. The economist argued that the minister should be more concerned about the establishment of state-funded companies in the passenger transportation sector. He raised concerns about the creation of BakuBus, a state company that receives significant investments from the state budget, the inflated prices of bus purchases, and the unprofitability of the company. Beidamirli also questioned the minister's lack of response to public concerns about these issues, such as the high cost of installing road signs by the Baku Transport Agency.

According to Beidamirli, while the state can establish certain rules of the game, such as setting license fees, if taxi drivers are already paying taxes regularly, the government should not impose additional taxes or interfere in economic processes. The economist emphasized the importance of preserving citizens' right to choose and allowing market forces to operate naturally.