Uberization and its ethical challenges: the case of Russian taxi market

Pandemic situation in Russia, 2020. Covid-19 seems to damage the taxi market significantly. BusinessStat in their 2020 report stated that the market of taxi rides in Russia may slash down by 11% due to household income decline and quarantine measures, but according to the official statistics of the Department of Transport of Moscow, passenger traffic in the taxi industry was dropped by 59% at the end of April (RBK, 2020). According to a source close to the Vezet management, the number of taxi rides has fallen by 60%, in some cities to 80% (Komsomolskaya Pravda, 2020). “If earlier we were waiting for an order maximum of 3-5 minutes, now the waiting time is 20-30 minutes” says one of drivers to the Kommersant.

By expert estimations, approximately 80-90% of taxi drivers have lost work. Some taxi parks and traditional taxi companies are also facing problems because of it, especially those that are owning parks of new cars and have to make leasing payments, they are stumped and close to a status of bankruptcy, as some of their owners say, it may erase traditional taxi businesses and keep only aggregators (Kommersant, 2020). At the end of march the Government of Russia acknowledged that road transportation is one of the most damaged spheres because of coronavirus infection (Federal Tax Service of Russia, 2020).

Companies are having strategic pivot, Yandex.Taxi started to deliver products from Yandex.Eda and Yandex.Taxi (Yandex's food delivery services) via taxi drivers (Komsomolskaya Pravda, 2020), the same as Citymobil with Mail.ru Group's Delivery Club (Vedomosti, 2020), also drivers of these companies are having a new type of taxi ride -- they are delivering small packages, sometimes as a couriers (Autonews, 2020). “We also believe that the delivery will allow drivers connected to Citymobil to partially compensate for the reduced demand from passengers for travel” said Vitaly Bedarev, CEO of Citymobil (VC.RU, 2020).

During a pandemic, aggregators are trying to make socially valuable actions, Yandex.Taxi have created a project which is aimed at helping fight the coronavirus, they allocated 250 million rubles to organize transportation of doctors testing for coronavirus and delivery of products packages to those in need at home, and 600 million rubles to help taxi parks with disinfection, and support drivers and couriers that have infected by covid19, and more than 500 million rubles to stimulate demand of taxi, for example, by providing travel discount at the expense of the company, the total amount of aid from Yandex in various directions (education, small business support and others) more than 1.5 billion rubles (Yandex, 2020). Citymobil provides free trips for blood donors with antibodies to coronavirus all around Russia (TASS, 2020) and free doctors transportation from one of the hospitals in Moscow, these aggregators and their parent companies Mail.ru Group and Yandex believe that their forces may help in fight with coronavirus (Vedomosti, 2020).

Chapter 2. Analysis of Russian Taxi Market

Online services that allows users for ordering a cab are gamechangers, for the past five years they have changed the whole industry, from the way users may order it to visible transformations of the whole industry (McKinsey Center for Government, 2018). Market is rapidly developing, according to Goldman Sachs analysis, aggregators and services for ordering a taxi are the leaders of the market share comparing to traditional taxi business with dispatchers and other intermediaries, aggregators' share is having a clear positive trend and it could potentially reach about $285 billion by 2030, estimated at $36 billion in 2017 (Goldman Sachs, 2017).

The Russian taxi market one of the youngest has its own characteristics. Thus, according to a study by a London-based HSBC Bank in 2019, taxi rides in Russia are cheaper than owning your own transport, if a person travels less than 5388 kilometers in a 10-year outlook. The average price for a trip is about 130 rubles in regions of Russia and about 350 rubles in Moscow, which is equivalent to $2 and $5 respectively. “Taxi prices are proportional to people's incomes in Russia, but car prices are not” -- the HSBC representative affirmed. This particular reason has a significant impact on the number of rides around the Russia and considerable growth of the industry. It is even sometimes cheaper to get a cab instead of using a public transport that has a poor condition and communication in some of the cities, according to HSBC analysts research by Discovery Research Group in 2016. However, despite inflation and other economic factors, prices for taxi rides continue to decrease, from 2014 to 2018, the average price decreased by 16.9% (BusinesStat, 2019), even the ex-CEO of the company “Yandex Taxi” Tigran Hudaverdyan in an interview with the “Kommersant” magazine in 2017 said “In fact, we compete with private cars and public transport.” According to the Alexander Anikin, head of the efficiency department at “Yandex Taxi” platform, such prices are achieved due to the high technological development -- navigation and algorithms help the driver to spend less gasoline on idling. The system distributes orders so that his schedule is tightly packed, so the driver performs more orders (Kommersant, 2019).

Typical social profile of an Uber driver in Russia -- a man (95.4% of the respondents), married (62.5%) that got a higher education (81.6%) and started to work with Uber because he lost his job (63.2%), on the second place (29.3%) a person started to work with an aggregator, because he was searching for a part-time job according to research by Center for Advanced Economic Research and Universities in 2017. The authors of that research are also clarified that every third driver has no other job, but Uber. For more than a half (58.6%) of all respondents, income has increased slightly and for 17.5% significantly. An average income of a driver in Moscow, Saint Petersburg, Ekaterinburg and Kazan varies from 50 thousand rubles to 100 thousand rubles in 2017. The authors have also analyzed index of satisfaction where 43.6% of the drivers were absolutely fulfilled, 46.8% were half satisfied, 8% were not really satisfied and 1.6% were not satisfied at all. Every fourth driver will work with an Uber until they find something better. About half of the drivers with previous taxi experience highlighted a higher confidence by working with Uber.

Habits and user behavior have its own contribution to the market. Russia is in the third place by the percentage of people whose phones have taxi applications installed. Thus, according to analysts, 45% of Russian citizens have at least one taxi ordering application on their device, this number is even ahead of the USA with 40%, the country where an Uber app was created. China is the leader of this rating with 51% and Mexico with a second place and 46%. But the prior competition between aggregators concentrated in Moscow, where the number of trips in taxi made via mobile applications increased to 85% with 95% satisfaction index, it takes only 4-5 minutes to have an ordered taxi come to the passenger, unlike 30 minutes earlier, before the launch of online taxi services in Russia in 2011, cost of the ride were lowered from 700 rubles at least by 35%, now it costs less than 0.05% from an average salary in Moscow or 1% from median level in the sample, in Berlin average ride costs 0,11% from an average salary (McKinsey Center for Government, 2018).

As reported in the research of the industry by the Analytical Center for the Government of the Russian Federation in 2019, the volume of the legal taxi market in 2019 is estimated as 709 as the whole and 425,8 billion rubles by aggregators, consequently having distributed 60.1% of the transport to aggregators. If the scenario would have been continued to be as inertial, the market share of aggregators would achieve 65.5% by 2022, through a proactive aggregator policy, the Analytical Center for the Government of the Russian Federation claims. But due to pandemic situation in 2020, this forecast may not be accurate, Uber has already claimed about $2.9 billion losses quarterly because of worldwide shutdown, which is stated to be the biggest loss for the last three quarters (The Verge, 2020).

Consolidation is a way of strengthening the role of the aggregator on the market, increasing share of the company. It may even ensure the protection of consumer rights, as Anatoly Golomolzin, the Deputy Head of FAS states, moreover, he claims, that “To effectively develop the market in conditions of fair competition, such measures should be taken by all market participants”. In 2017, Russian antimonopoly authority approves a joint venture between Yandex.Taxi and Uber. FAS Russia have also issued an order for aggregators to realize actions that can optimize the relationship between services, taxi drivers and passengers. For example, they have to provide passengers with full legal properties of the company that is eligible for carrying the transportation (FAS, 2017). As Forbes states in 2017, Uber has suffered of losses and consequently lost to Yandex, because for several years in a row, since its appearance on the market in 2014 and active price dumping to attract more passengers with its UberX fare.

Despite all of the Uber's efforts, the company has never been able to bypass the leading company Yandex.Taxi, that by the 2017 had about ~50% of the rides ordered online and Uber got only 23%. For three years of tight competitive race in Russia and the CIS, Uber payed $170 million and if they would have decided to continue, then they “will just burn money into nowhere” states East Capital Foundation partner Jacob Grapengisser to the Financial Times. The new merged company is registered in the Netherlands under the name MLU B.V. “Not only is this partnership good news for our two companies, it is also great for riders, drivers and cities across the region. This deal is a testament to our exceptional growth in the region and helps Uber continue to build a sustainable global business,” states Pierre-Dimitri Gore-Coty, Head of Uber in Europe, the Middle East and Africa (United States Securities and Exchange Commission, 2017).

Analytical Center for the Government of the Russian Federation in 2019 report states that on the Russian market five big aggregators that are dividing the market share:

* 40% -- Yandex.Taxi

* 12% -- Vezet

* 9% -- Maxim

* 5% -- Gett

* 1% -- Citymobil

The rest is shared by other aggregators (6%) and traditional taxi market (40%). This data excluded illegal segment and apply to Russia as a whole in 2019. Competitive positions of the aggregators may also differ from city to city. For example, Yandex.Taxi is the leader in cities with population of more than 500000 people, but when the population is lower, from 100000 to 500000, Yandex.Taxi, Maxim and Vezet have equal share. In cities with population lower than 100000 are mostly Vezet and Maxim. This is might be the reason why Yandex.Taxi decided to acquire Vezet in July of 2019, hoping for a regional market entry (Analytical Center for the Government of the Russian Federation, 2019), but the petition was revoked from the Federal Antimonopoly Service of the Russian Federation several times and in 2020 “the company wants to focus on supporting current partners -- drivers and taxi companies -- in the face of declining market demand for the time being” reported a source close to Yandex.Taxi (RBK, 2020).

Competition on the market allows passengers to have cheap and comfortable rides, especially when aggregators just entering new region, lowering the price of a ride for a passenger and paying the driver extra money (Business Online, 2019).

As the report of analytics indicates, the share of people that are using taxi on a regular basis is rising, from 12% in 2014 to 15.4% in 2019. Taxis are playing the vital role when public transport gets out of service, especially in small cities, getting to 45.7% share of citizens in cities with less than 100000 population, that suggests taxi as the only way out in the situation with public transport shutdown. “The worse developed the public transport, the more taxis are used” (Analytical Center for the Government of the Russian Federation, 2019).According to the same report, 32% of the population uses taxis at least once a month (another report “Taxis in major cities: role and experience of regulation” in 2017 stated that it is 30%), 22% several times a week and 5% are using taxi daily. Moreover, taxi services have the third place by the most popular ways of transportation, slightly behind personal car, 27% versus 34% consequently, 70% of the population are using public transport. Disabled people and parents of disabled children, as well as young mothers, pregnant women and single parents are the most popular segments that are using taxi.

After a rapid development of the industry in 2015-2017, the market enters a new phase, reaching maturity and becoming stable. Even the number of drivers stabilized in 2019 with a slight increase of 3%, 584 thousand in 2018 and 600 thousand in 2019 (Analytical Center for the Government of the Russian Federation, 2019). According to analysts, drivers' income has also increased by 1.5 times, in 2019 the average income of a driver in Moscow and St. Petersburg estimated in 83 thousand rubles, in other cities with the population above million was about 73 thousand rubles.

Regulation of the prices in the future is a tough topic. Drivers in some cities are not agree with aggregators' policy on rates, because some trips are cheaper than on public transport and they are not earning enough. Drivers think it is necessary to increase the cost of travel (Znak, 2019). Some of the drivers decided to protest against these rules and created dialogues in messengers for all of the regions in Russia, where they may discuss how not to cooperate with aggregators, some of them are encouraging others to call own prices for a trip to a passenger (Business Odincovo, 2020). As ex-CEO of Yandex.Taxi Tigran Hudaverdyan says: "If we will increase the cost of the trip by 10% for the sake of experiment, the number of passengers would immediately drop by 10%. People open the application, see the price and decide that it is better to go by subway" (RBK, 2019).

Aggregators are working on the principle of processes' automatization; they are developing algorithms that are helping drivers to effectively distribute incoming orders and increase coefficient of use, price drops in contrast to traditional taxi (McKinsey Center for Government, 2018). According to McKinsey analysts due to cheaper rides, this case of cheapening may effect on the use of personal car or a public transport and even replace it (some researchers disagree with this statement, for example in the research “Taxis in major cities: role and experience of regulation” in 2017 analytics are stating: “The high difference in travel costs reduces the possibility of competition between taxis and urban transport” where they compare average price of 450 rubles for taxi and 40 rubles for a subway station).

Attempts to limit activity of online taxi, for example, by restricting the issuance of taxi licenses, may result in a decline of technological satisfaction index among citizens. For example, it happened in Germany, when the authorities restricted their number. It may also be the factor that will lead to an increase in the unregulated illegal market with no strict standards of quality and lower motivation of legal drivers to work due to lack of competition, states McKinsey's report. For each ride services like Yandex.Taxi are taking commission, it was about 5% in 2014 and have risen up to 23% and sometimes even more, commission in Citymobil is about the same level; government has a draft law of regulation in this sphere, but it is still under developing, if it is going to be released, aggregators will have an increased level of responsibility, changes in regulations of the price and there might be a fixed minimal salary for a taxi driver (Vedomosti, 2019).

As Rospotrebnadzor states in their article “Aggregators, being information intermediaries, generally do not bear responsibility for quality and conditions of granting of the goods and services offered on their platform.” This is applicable to Yandex.Taxi, Citymobil, Gett and other services that are distributing orders through information systems, aggregators have the right not to return the transaction amount if the client was dissatisfied or even if the service was not provided, because the information service did its job. The contractors -- drivers have to be responsible for obtaining a taxi license and tax registration on their own, otherwise it is disciplinary, because aggregators are creating work environment and do not have to solve contractor's practical problems. But ride-hailing services sometimes fail to ensure the safety of transportation when drivers' medical conditions, driving license and work and rest regimes are not checked, thus putting passengers at risk and depriving them of their right to safe transportation as established by the law Art. 7 of the Law of the Russian Federation 07.02.92 ¹ 2300-1 "On Protection of Consumer Rights", services have to follow the law Paragraph 1 of Article 20 of the Federal Law of 10.12.95 No. 196-FZ "On Road Traffic Safety" -- it clarifies that all of the legal entities and private entrepreneurs somehow engaged in activities related to transportation on the territory of the Russian Federation are obliged to organize their work the way it follows requirements that are ensuring safety (Rospotrebnadzor, íåò äàòû). Yandex.Taxi for example uses a term of carriage for each ride where taxi services (taxi parks in this case) are responsible for technical condition of the incoming car, conformity of professional qualities and qualification of a driver to the requirements of the service (Yandex.Taxi in this case) and the current legislation of the Russian Federation (Yandex, 2018).

Compensation in case of an accident on the road in a taxi was a difficult subject and was only possible through the court, especially when there was an illegal taxi driver that refused to compensate for the damage, complaints to the aggregators were senseless in this case, states Rospotrebnazor (n.d.), they are adding that by the resolution of the Plenum of the Supreme Court of the Russian Federation of June 26, 2018 ¹ 26 "On some issues of application of legislation on the contract of carriage by road of goods, passengers and luggage and on the contract of transport expedition" the responsibility of the aggregator comes in two cases: if the aggregator has entered into a contract on its own behalf, or a bona fide consumer, considered that he enters into a contract of carriage directly with the aggregator (Rospotrebnadzor, n.d.).

In December of 2017 Yandex.Taxi was the first aggregators who started to insure every taxi ride throughout Russia (RBK, 2017), both the driver and passengers were insured for 2 million rubles, then in early 2019 Gett started to insure rides by 2,5 million rubles (Interfax, 2019) and Citymobyl for 2 million rubles (Yablonsky, 2019). Aggregators are still out of law and lightly regulated, many drivers and passengers are waiting for an updated taxi law, in which aggregators and its drivers will have a higher responsibility than the current one (RBK, 2019).

The State Duma is considering a bill that will make adjustments to the work of aggregators, in 2019 they proposed that taxi drivers will be obliged to have Russian driver's license (or pass through Russian qualification), taxi licenses will be raffled through an auction, and aggregators will bear joint responsibility on equal terms with the carrier -- taxi parks and self-employed drivers and more (RBK, 2019 and TASS, 2019). There are no evaluation on the difficulties of some of the points, for example, there are more than a half of drivers in Moscow are foreigners (Barshev, 2019) and it is unknown how an obligation to pass Russian driver's qualification or obligatory to have Russian driver's license will affect the market. This law is wanted, but Vyacheslav Lysakov, the first deputy chairman of the State Duma Committee on State Construction and Legislation, told “Rossiyskaya Gazeta” that now it is easier to rewrite this law than to improve it (Barshev, 2019). But nevertheless, aggregators like Vezet, Gett, Citymobil and Yandex.Taxi are friendly toward this law and commented that the bill takes into account the peculiarities of the Russian taxi market, but needs to be a little modified, for example, they have pointed out that "unjustified restrictions on the number of taxi permits or overstated requirements for drivers" might be followed by an unregulated illegal area “with no quality control, insurance or adequate safety measures”, moreover joint and several liability of all market participants is questionable, because they are not hauliers of the ride and the law should divide responsibility between different market participants (TASS, 2019). At the beginning of 2020 it became known that this bill, which is being created and edited by the State Duma for over six years, was again rejected by the presidential administration and the main political party “Edinaya Rossiya” who postponed global taxi industry reform for an uncertain period (Kommersant, 2020).

Chapter 3. Methodology and Results

3.1 Methodology

Consistent with analysis of worldwide cases, like uncertainty on the taxi market and in community of drivers happened due to Uber's enter in Paris (Wentrup, Nakamura and Ström, 2019), a fact of uberization might still be questionable in other countries and needs to be examined to understand attitude towards uber platforms among employees and employers. In order to understand intentions, behavior, motivations and perceptions in everyday context of such ride-hailing services that are used in everyday life, qualitative research approach have been chosen as the most appropriate for this article. Case-study approach based on empirical data from in-depth semi-structured interviews with 34 taxi drivers that are working with the biggest aggregators in Russia like Citymobil, Yandex.Taxi & Uber Russia, Gett, Vezet and 5 managers from these platforms to hear both opinions from both sides. Secondary data analysis will be reflected by examining cases, articles and other open-sourced materials about uberization in Russia and cases from other countries. The combination of these methods makes it possible to study the situation with the uberization and find information for the objectives of this article mentioned above. ethical market industry taxi

Semi-structured interviews with 34 drivers were done while they were in service on the streets by ordering a taxi and talking in person or through preliminary contact in social media platforms and phone calls after. The interview for drivers consisted of 20-25 questions that were divided into three sets, slightly vary from one driver to another, depending on the dialogue and driver's mood. The first set of questions was intended to learn about person's work experience in taxi. For example, what services a person works in and for how long, have they ever worked in a taxi before aggregators entered the market. Second set of questions consisted of Semi-structured interviews with employees of the firm, that created this platform were about common problems, its solutions, comparison to other market, comments on cases and work with established regulations of the government. The second set of questions is considered the main one for this study, the author learned from the driver about reasons to work in a taxi, motivation and intentions, advantages and disadvantages of this work, frequent problems and its solutions, attitude to aggregators and plans for the future. The last block of questions had sensitive questions about driver's earnings.

The community of drivers in social networks turned out to be closed to outsiders and it was difficult to build a trusting relationship instantly. First, they had to talk with outsiders to side topics before they decided to talk to the author about the taxi market and their work, because they thought that the author might cooperate with aggregators or news. Average time of the interview is 30 minutes.

All of the answers from in-depth interviews with drivers interviewed offline and by phone call then was combined together in one table, where each quotation had its own category that was analyzed independently. The most typical or subjectively vivid answers from each category were then chosen to present in this research.

Interviews with aggregators' representatives had a similar methodology as for drivers. The author was able to contact people from different companies to talk about uberization based on the company where they work or had previous experience. All respondents agreed to be interviewed on condition of anonymity, consequently the names in the Results part below do not correspond to their real names. These interviews covered three companies - Yandex.Taxi, Citymobil and Gett. Average interviews with insiders from aggregators lasted about an hour and covered five blocks excluding acquaintance. First set of questions was about the way respondent's company works with drivers: how the recruitment process takes place, how drivers adapt to the service, how trust is built. how their work is regulated, how their problems are solved, how feedback from drivers is collected and what are the ways for driver to get a support in difficult situations. Second block of questions covered their work experience with taxi parks and what are their regulations. Third set was about the Government in Russia, do services feel comfortable in the current legal environment, how the government helps aggregators or hinders the operation. The fourth set of questions was about service limitations, what typical problems the aggregators have and what prevents them. This block of questions overlaps with the previous one. The last block of questions is additional, in it the author asked the representatives of aggregators about the international experience of other services and competitors in Russia, unrests in other countries and the possibility of similar scenarios in Russia, about already existing boycotts among their drivers and the efficiency of the taxi market after the entry of aggregators, their good deeds for the society.

Answers from in-depth interviews with insiders from ride-hailing were also categorized by thematic clusters and sorted in a table intersecting the drivers' table so that drivers' and aggregator representatives' answers to the same question, topic or category., could be comparable. Each quotation was analyzed independently. The most usual answers were chosen to represent aggregators' opinion to objective of this paper, standing with quotes of drivers or alone, if drivers haven't mentioned this topic.

All of the answered where translated by the author from Russian language into English manually in an attempt to preserve the original meaning and idea of the respondents.

3.2 Results

An overview of the respondents' profile.

If we study personal attributes of an interviewed driver, considering average values, we may observe that this is typically a 41-years old man with Russian citizenship, who works in the taxi services for about 3 years. It is important to mention, that some drivers decided to skip demographical part and have not disclosed any personal and demographical information. The study found that two of the 34 drivers had been working in a taxi for over ten years, part of the respondents worked in the taxi before the aggregators entered the market. Some of the drivers worked as needed, taking breaks of six months, a year or more. Another 5 drivers said they no longer working with aggregators, because this work did not suit their needs.

Table 1. Profile of respondents - drivers

Respondents were in 11 cities in Russia and described the specifics of the local taxi market. Most taxi drivers worked for one of the three companies: Yandex.Taxi, Gett, Citymobil, but there are also those who use atypical taxi aggregators, which are started by people “who knows how to work in a taxi” with a reduced commission compared to huge aggregators, a few more respondents try the scheme of work through the Telegram - they fill out their profile in the messenger, describing the cost per minute and per kilometer and turned on searching for people nearby function. According to their words, there are very few orders from this scheme, but if there is - money goes straight to them, without a need to give the commission to the taxi park or aggregator.

Characteristics of insiders that are working in management of aggregators is much simpler. Four out of five are men with an average age of 29 years old. All respondents were in/from Moscow, and at the time of the interview they worked for one of the three companies: Yandex, Gett, Citymobil (one of the respondents has no longer worked in an aggregator). Some of the respondents had experience working with several companies from the list in the sentence before.

Table 2. Profile of respondents - managers

Respondents held different job positions, but each of them somehow understood the peculiarities of working with drivers in the aggregators and were able to answers some of the questions. If they found it difficult to answer a question, respondents could easily skip it and answer the next question.

Intentions to work with an aggregator

When the author started to talk about motivation to work in aggregators, most of the respondents among drivers appeared to have financial motives as the main driver to work with ride-hailing services and also stated it as the main problem that will be described later in this paper.

“Taxi drivers do not care about paid holidays and official work privileges; the main thing is to get comparable money. We have families to feed, finding another job is risky”

This opinion was also stated in interview with Yandex.Taxi representative:

“In uberized companies around the world, drivers want official employment, insurance, vacation. And, for example, in the States, the state takes the drivers' side, but not in Russia. In Russia, the requirements of drivers are different. For them, the main thing is money. Tariffs are higher, commission is lower, some features in the app, that's all.”

The feeling of freedom and lack of attachment to constant hours of work was also one of the most popular statements among the interviewed drivers. Drivers can take shifts at any time of the day and night, choose when to arrange a weekend and when to earn money. Some of the answers that highlight this opinion:

“I like to drive a car, earn money every day, and be able to leave work at any time.”

“In Yandex taxi free schedule. And if I wanted to eat, I just get off the line and go for a snack. If I do not want to work, I do not work. If I want to finish my work for the day, I just take the last customer and go home.”

“In fact, it is the best job in the world, If I want to, I'll go out to work. If I want to, I'll send everyone to hell. You live your life the way you want.”

Some of the respondents said that that in their circles people are working on taxi services, because of desperate: debts on credits, loan or mortgage debts, lack of education to handle other jobs.

“There are no professionals left in the taxi right now. There are people going to work there who cannot work elsewhere. Anyone can go to work. Mostly, taxis are staffed by migrants or people from marginalized groups.”

According to the overview of the market in this research, the share of migrants is relatively high. Unfortunately, it was not possible to talk to them. High numbers of interviewees have also commented on the love to work in taxi, even though most of them were not satisfied with current earnings and conditions of work. Oleg, for example, said:

“Taxi is like a drug, you drive like an idiot, you take orders. The only thing you get is 100-200 rubles per hour when you count the money later, so I'll earn this money better at the construction site.”

At least half of the respondents said that they are working on several aggregators at the same time, and in small cities for such taxi companies that stayed as a representative of traditional taxi business, therefore drivers said that they would rather go to order from the taxi park than through the aggregator, as the payment is higher and “the passengers are better”. They are continuing to work even if the situation is getting worsen.

“I am staying at this work, because that is my profession”, said Alexey.

“I like to drive a car, earn money every day, and be able to leave work at any time. There are no conveniences. Only the fact that when you take an order you do not know where they will go and for how much, but I am used to that. I can work all week and not get tired”, said Dmitry.

When representatives from aggregators are talking about possible reason to work among drivers, they are mentioning that efficiency is a key to work in such services. A person from Yandex.Taxi said:

“Efficiency is the core of Yandex.Taxi, we try to make the service as convenient, fast and comfortable as possible. We have smart algorithms that distribute orders and set prices, there is practically no downtime for drivers. Although before they could stand for half a day to take at least one order.”

The systems of distributing orders got much simpler too. Driver are no longer needed to have a turned-on radio, waiting for an order that is distributed by a real person. Insider from Yandex.Taxi states: “The whole system is transparent - drivers can see directly through the application how much they have earned from each order”. Even though some drivers are disappointed that the level of entry to this job is quite low and almost any person with driver's license, appropriate car (or a rented one) and no crime history may take orders on the same day of “employment”.

“Aggregators killed the taxi market. The taxi driver's profession was lowered below the skirting board, beyond cockroaches [means that aggregators never consider drivers as something valuable]. Anyone leaving the house can become a “taxi driver”, said Oleg.

There were also comment that this availability leads to professionals being forced out of the profession, replaced by marginalized people.

“There are no professionals left in the taxi right now. There are people going to work there who cannot work elsewhere. Anyone can go to work. Mostly, taxis are staffed by migrants or people from marginalized groups.”

A few more respondents have also mentioned this fact, even though there is a crime check for each driver. Drivers' negative opinion towards easily coming newbies might be explained by the fear of losing their job, as other people come to the industry and may accept all conditions, wherefore replace previous drivers in a long term. But the fact is that average lifespan of a driver is about 3 months. One of the representatives from Yandex.Taxi said that this is actually a good thing:

“People started taking taxis more. Comfortable, easy, cheap. A service where people can come in and start working. Especially relevant in crises. It is great when you can give people the job they need here and now.”

To summarizes this part, drivers go to work in a taxi for several reasons: 1) because of previous financial problems, and it is easy to get a job in a taxi 2) because this job gives them a free schedule 3) because this is their profession. It seems that there are no ethical problems with regulation, so the principle of self-regulation is possible, but co-regulation with governmental mechanism should be considered in order to check legitimacy of criminal history, if services will not be able to cope with it fully on their own.

Problems and solutions

This item will list the problems faced by drivers when working with taxi aggregators. In addition, the opinion of a person from the company will be attributed to them. This section helps identify deep underlying problems, causes and consequences for both drivers and businesses.

Driver's earnings problem.

Almost every driver somehow mentioned that they are not satisfied with earnings they have when working with aggregators. “They are just stilling our money while doing nothing”, said one of the drivers. Solution for some of the drivers is simple - increase fairs, Evgeniy said:

“Why is there 50 rubles in a tram, 50 rubles in a minibus, and 60 rubles in a taxi? Why is it so? The starting price for a taxi should be at least 5 times more expensive than for a bus. If a shuttle is 60 rubles, then a taxi is 300 rubles. Only for boarding. Next - turn on the counter and let's go.”

Some of them understand, that by increasing the fair will lead to passengers' churn, but they think that this is temporarily, and they will get their rides anyway, this is what Yury said:

“Demand will not fall. How did wealthy people used to take taxis before? The taxi driver was a golden man. Let them [passengers] go by a gazelle [minibus] or a trolleybus. I'd rather watch 1.5 hours of YouTube, but I'll make one request, as before, and 450 rubles in my pocket just in 30 minutes. I'd rather sit for an hour and talk to the friends [in a chat]. I would make 5 orders a day and it would be great - money to the family and the car is filled. It is better than 40 orders for 4 thousand, and then Yandex will take 500 or 600 rubles.”

However, a driver with 15 years of experience in taxi, as he claimed, said that this situation of being unsatisfied by the earnings had been always pursuit by taxi drivers.

“Actually, I've been in a cab for over 15 years. And I've never heard in that time that a taxi driver was happy with his earnings. That's the nature of the job”, said Viacheslav

Drivers also say that increasing the fair with a little passengers' churn will help them not to stress during infinity rides while the time is limited, but aggregators' representative have their own opinion on increasing the rates, this is what an employee from Yandex.Taxi said:

“For the reputation of the service it is important for the user to be able to leave any place at any time [by a taxi], so if drivers do not accept the order, they have a lower score, thus reducing the priority in receiving orders”

This score in Yandex.Taxi is called “activity points” with the maximum of 100 points, if drivers cancels the ride, an applications lowers his score and the drivers drops in priority among other drivers nearby, so if two cars are at equal distance from each other, the order will come to the driver who has a higher rating. This system motivates drivers not to reject trips, even if they do not have an advantage. For frequent refusals or violations of service rules, the driver is blocked. It is important that they are not fired, because they do not work for an aggregator, but for a taxi-partner.

“Drivers are forced to take "free orders", if you do not, you're blocked”, said Stepan.

“If Yandex is an information platform, it should provide you with all the information about the trip - who, when, where from, where and for how much. Now there is no choice at all. If you refuse, minus the activity points. There's no choice”, said Ilya.

The fact that increasing the price leads to churn was also mentioned by one of aggregators' representative:

“This is a very competitive environment, even a small increase in cost leads to a large outflow of passengers, as they can compare the cost in one minute in different aggregators.”

When the Author expressed this opinion at the end of the interview with drivers, some of them did not believed this fact. Trust is a separate part of the problems about money, after the interviews with drivers, the Author suggests, that at least a half of drivers do not trust the service they work for at all. For example, Yandex.Taxi has its own YouTube channel, said one of the representatives of the service, on which they tell drivers about the possibilities of the service and how to earn by working in a taxi. One of the shows on this YouTube channel is when employees replace a taxi driver for a day to feel the work in a taxi and show that it is possible to earn money. The only thing is that these videos were criticized both by respondents in interviews and comments, where people wrote that from 2000 rubles earned by the service representatives, it is necessary to subtract additional costs such as gasoline, car rental, washing and so on. In addition to this show, there are other videos on the channel that tell about the features of the service. Also (all services already have) there are special groups for drivers in social networks, where they can get an answer from the support service to their questions.

“The price policy in general from the ceiling [from nowhere], not tied to the expenses of the taxi driver, is confined only to the aggregator itself for profit, benefit and profit. There is a proverb between taxi drivers, aggregators fight among themselves for market share, to the last taxi driver”, said Viacheslav.

Another driver said: “We need the aggregator to reduce the commission”. This is also solution of some drivers who think that ride-hailing services are having too much. There is about 17-25% commission from each ride (it depends, an aggregator, a class of a ride and a city may affect it) and commission of a taxi park (it varies from one park to another). But a person from Yandex.Taxi states: “Yes, there's a charge for that. But that's fair, because you sit there and do not waste time solving any problems, you get orders automatically.”

Setting tariffs is another problem in this environment. Almost a half of respondents said that ride-hailing services cannot do this, because they are not carriers, they are just like a bulletin board. Anatoly said:

“Aggregators work outside the legal framework and are forced to work […] The aggregators set tariffs, although they are not legally entitled to do so”

Respondents from Gett and Yandex.Taxi affirmed that by the law they are no able to set tariffs, therefore each time they ask the driver to take the order or refuse. If they were a carrier and the driver was on them, they could not do it.

When the author asked one of the drivers who works in Moscow about average earning statistics, he claimed that “it is impossible to earn 84 thousand rubles, taking into account expenses, taxes, charges for rent of the car, the driver from the completed order takes only 20-30 percent”

Drivers' earnings are definitely one of the key and challenging topics for both drivers and aggregator services. There are several points established in this problem: 1) Some drivers are dissatisfied with aggregators' dumping, which makes them carry cheap orders and demand higher tariffs 2) Services are trapped in a vicious circle, when their competitors also reduce prices to take over the market, and according to interviews with aggregators' representatives, even minimal changes in price can lead to user outflow, and as a result, drivers, 3) It is also important for services that any person who ordered a taxi can leave the place where he is, even if the ride is cheap, the driver must accept it, 4) Taxi rides are sometimes compared to the prices of public transport: this is good for users (high comfort at a low price), but may be bad for public transport, which relieves the burden on public roads and the taxi industry when drivers' earnings fall.

In such an uncertain environment, where an increase in price is dangerous for the operation of ride-hailing services by the outflow of passengers, and as a result, customers, self-regulation is not possible, because then the advantage will be competitors who win on the trips cheaper. Governmental regulation is needed and can consist of 1) a single minimum cost of travel in all aggregators, 2) on the example of other countries, drivers should receive a minimum fee for an hour of their work (and not only for an hour of work with the order, but also for downtime), 3) limitation of commission percentage for each of the aggregators.

Therefore, the dumping war between aggregators will stop, as there will be a minimum cost of travel, drivers will be able to count on an increase in income (provided that aggregators do not increase their commission, which should also be controlled by the state), or drivers will receive a fixed payment for one hour from the moment they leave the shift.

Fraud

Some drivers told the Author about existence of the fraud with driver licenses among taxi drivers. The scheme is simple, drivers usually connect to the aggregators remotely; the validity of the entered data should be controlled by the taxi or partner ride-hailing service, the aggregators disclaimed that responsibility. In some cases, it is not even necessary to have a person nearby, the driver simply sends photos of his documents to another person and he activates them in the system. And if the documents are fine, he can start ordering instantly, but not the fact that it will be the same person as on the documents. Through the interview we managed to find out that almost every respondent has acquaintances who has abused this rule-breaking, in some cases they themselves.

“Aggregators do not interfere with left accounts. I drive the same car, there are 11 different names. And you think that aggregators do not know about it?”

One of the respondents told me that he wanted to work a lot, so he frauded the system and asked his acquaintance to register in the system by his documents and that worked, for more than a 1.5 years of his job experience no one has never noticed it, he said.

“When I started, I was 19 years old. And I could not work. I had to have three years' experience. And where will I get it from if I was given a license at 18, and I worked through the profile of an acquaintance who had 3 years of experience. And remote employment allowed me to do that”, said Michael.

This is also allowing foreigners to work in Russia without valid driver's license. For example, one of the drivers said that Russian drivers' licenses might be at least checked through governmental databases, but for example, drivers' licenses of people from Uzbekistan cannot be checked remotely and taxi parks or partners have to check it via photo or offline, looking at the quality of this documents. And as it happens, let them work in the service.

“Instead of proven drivers now migrants who not only do not know the city, but may not even have a [driver] license”, said Stanislav

The very fact that the person behind the wheel may not be the one listed in the details of the trip is alarming. People with heavy criminal histories are not taken to services, but they can just buy a fake account. And if the services block that account, you can always buy another one, as a person with an answer above, who said that he has already 11 accounts for one car, but ride-hailing services do nothing with it.

“Here, the passenger was held hostage to a system created by aggregators and enshrined in law. When anyone can become a taxi driver, it is easy to ignore all the requirements of the law. Even for three years of driving experience. That's what aggregators do. Presenting them to you as verified qualified drivers”, said Stanislav

This is seeming to be a huge security problem for passengers. Fortunately, if something happens to the passenger police may try to find a driver via CCTV and information about the car if it was not compromised too, said one of the drivers.

Attempt of drivers to deceive the system after blocking (or in the absence of necessary documents/experience) and register in the service through fake documents leads to a number of serious consequences, first of all, serious security breach. The fact that the principle of transparency is violated is the least of the evils. A passenger simply does not know who he is traveling with, trusting his life to a stranger whose data is not even true. In case of danger to the passenger's life and health, the police may also have difficulties, at least at first. Services should regulate this area and track the criminal history of people, monitor the emergence of fake accounts, but since such cases are still there and many respondents mentioned them, and services do not fully cope, it is important that the state has applied its mechanisms to this. Ideally, this should be a coregulation of services, state instruments and law enforcement agencies so that drivers cannot do it so easily and with impunity. Moreover, it should be taken into account that some drivers are forced to buy a fake account after they are locked in an application that may not always be fair, there should be a clearer division into rules among services and the driver should be able to appeal the decision of the service.

Conditions of work

Even though, according to the parts of this paper above, one of the main problems of Uberization is absence of official job's benefits, such as paid vacation, minimum monthly salary or insurance, only two of all respondents among drivers mentioned that they are disappointed with it.