Russian government set to grab all taxi consumer data

A taxi law giving the Russian government a monopoly over consumer data was passed in December 2022 and is aimed at Russian providers’ many problems such as illegal trips, a lack of responsibility on the part of ride-hailing companies, monopolization and poor working conditions.

It has replaced the previous taxi law which, substantially, is a copy of that in the Soviet era. Since its introduction, the industry has been dramatically changed by the emergence of self-employed drivers and ride-hailing companies with the municipal authorities losing control over the market, said Stanislav Shvagerus, head of competence center at International Eurasian Forum Taxi: “This is because the old regulatory mechanism, based on physical monitoring tools, became obsolete after digital technologies deeply penetrated the industry. Unfortunately, the regional authorities in charge of regulatory tasks often do not have the resources to create modern regulatory tools.”

Federal cloud platform

It has taken the government several years to develop a system that makes efficient use of digital instruments. At its core, the federal government will provide regional authorities with a government-owned cloud platform with the tools they need to regulate taxis. It will hold separate records of ride-hailing companies, fleet operators and self-employed drivers, with data automatically loaded from the databases of ride-hailing companies, the police, insurers and others.

Its general architecture is similar to platforms launched by cities in some developed countries. However, Russia will implement such a system at the federal level, said Shvagerus. He suggested that this approach is more progressive than China’s. In January 2023, the Chinese authorities announced a plan to consolidate the national taxi operations into a state-owned transport super-app, which is currently under development.

Experts are divided on the potential benefits of the new system. “Its only use for the Ministry of Transport is in helping to correct the market’ most general playbook,” said Konstantin Trofimenko, director of smart city research center at HSE University. “The federal platform is just a register of carriers, taxi booking services and cars broken down by regions.”

The law sets the stage for further reduction of illegal trips and growth of services such as telemedicine, said Alexander Ovanesov, managing partner of Arthur Consulting.

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