Solving the taxi problem in Baku: a roadmap to sustainable development and economic stability

In Baku, the bustling capital of Azerbaijan, the taxi industry is both an important part of the city's transport network and an important source of employment. According to the Ministry of Information Technology and Transport, there are currently 28,000 taxi drivers working in the city.

However, the taxi industry in Azerbaijan is undergoing significant changes due to the entry into force of new rules, which leads to a reduction in the number of taxis on the roads. According to the Azerbaijan Land Transport Agency (ANTA), legal entities and individual entrepreneurs wishing to engage in taxi transportation must now have the appropriate permits. This includes obtaining a school graduation certificate and a registration card for vehicles under the age of 15. After July 1, 2024, only cars less than eight years old will be eligible for registration.

Since most of their cars rolled off the assembly lines more than 8-15 years ago, the future well-being of their drivers is at risk. Solving this problem requires an integrated approach that preserves jobs, raises vehicle usage standards, improves service quality and promotes environmental sustainability.

One of the promising solutions may be the transition to electric and hybrid vehicles. China, which is facing an overproduction of cars (about 17 million per year), offers a reliable source of these environmentally friendly vehicles. By importing electric and hybrid taxis from China, Baku can modernize its taxi fleet while simultaneously solving two problems - environmental pollution and economic tensions.

To make this transition possible for taxi drivers, cars could be leased at a low annual interest rate of no more than 5% for up to eight years.A Chinese electric car with a power reserve of more than 400 kilometers is estimated at 35,000 manats with delivery to Baku. Currently, taxi drivers in Baku usually rent their vehicles for 25 manats per day. With a six-day work week, a driver can earn enough to pay 7,500 manats per year. Thus, with an acceptable financial plan, drivers could fully recoup their vehicles within six to eight years, which would guarantee them no financial overload.

This approach provides many advantages:

1. Job Security: By providing affordable financing options for the purchase of modern vehicles, taxi drivers can continue to earn a living without fear of being out of work.

2. Modernization of the fleet: The introduction of new electric and hybrid taxis will update the taxi fleet of Baku, which will lead to an increase in the quality and reliability of passenger service.

3. Environmental benefits: Electric vehicles provide zero emissions, which significantly reduces air pollution in the city. This is in line with global efforts to combat climate change and improve urban air quality.

4. Economic benefits: The state can benefit from the sale and import of vehicles, while reducing the operating costs of electric vehicles (cheaper electricity compared to fuel) can lead to lower taxi fares for citizens.

5. Public comfort: Passengers will be able to use more convenient and modern taxi services, which will increase overall satisfaction with urban transport.

The implementation of this solution requires coordinated efforts by the Government, financial institutions and the private sector. Subsidies and incentives for electric vehicles, supporting credit structures of banks and cooperation with Chinese car manufacturers are important steps in this direction.

Moreover, this model is not limited to Baku. It can be extended to the whole of Azerbaijan by providing a scalable solution to modernize the entire taxi industry across the country. By taking these steps, Baku will be able to solve the urgent problem of taxis, ensuring that drivers remain employed, the environment will be protected, and residents of the city will be able to use better transport services.