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

Regulation of ethical behavior in the markets. Covid-19 and its challenges for industry in Russia. Problems faced by drivers when working with taxi units. The peculiarity of the study of mechanisms that force companies to refrain from unethical behavior.

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Äàòà äîáàâëåíèÿ 18.07.2020
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“A worker at McDonald's gets more money than a taxi driver. He has 120r., all in white [officially registered] - insurance, sick leave, benefits, paid vacation. Stable salary. And I sometimes have 1000 rubles a day, but I'll drive 10-12 hours...”

Two respondents from aggregators agreed that these benefits are not the main drivers to work or leave work in ride-hailing services, people in this sphere are more motivated by an amount of money they get.

Almost every driver in the interview said about overwork in taxi and how it is affecting their lives. As they claim, the people, who rent a car for work, are in need to work at least 10 hours, because they will have negative profit instead. Only after 10 hours in average they start to earn their money. Sometimes they have days when they need to work even for 16 hours. For some of those, who is working on their own car this number is usually much less, because they do not have to pay fixed amount of money for the car. Here are some typical answers from drivers about it.

“Aggregators are not interested in working by law. By law, the shift should be 8 hours and not more than 40 hours a week, in fact, drivers are forced to work 80 hours a week, earning at the level of an ordinary clerk. Due to overtime, fatigue and accidents. Nobody works by law. Taxis are criminal almost like the drug business, only they do not get locked up or caught, and if they get caught, they get fined”, said Evgeniy

“A tired driver is scarier than a drunk driver. A driver who's worked 10 or more hours - stuck in. I fell asleep four times while driving and it is scary, believe me”, said Dmitry

“To get to some profitability, a taxi driver has to work 12-16 hours each. They have to feed their family, pay the loan and work. They get into an accident, fall asleep, take off on the opposite lane”, said Ivan

After terrific cases where drivers felt asleep on the road with passengers inside the car and crashed, sometimes fatally, the Government and aggregators started to work on this problem. “For example, Yandex.Taxi has developed a gadget that follows driver's pupils in order to evaluate tiredness, this mechanism worked, but costed too much and could not cover all drivers, so this project is frozen”, said the respondent from Yandex.Taxi. For now, the respondent adds, “there is a solution in cooperation with transport department of Moscow, one united database for all of the taxi services, that requests from aggregators encrypted data about the driver from all aggregators and not letting them work for more than 16 hours”. Other respondents form aggregators have also mentioned this instrument, but two of them said, that this is works poorly, because transport department cannot process these large arrays of live data, they just do not have the amount of capacity needed. Moreover, this system only works in Moscow at this time, in other regions there are blocks on a level of an app, so drivers may just switch them, if they would like to work more.

Before services introduced limitation on the time of work, drivers could work even more, this is what one of the drivers said about his experience before:

“Used to work the way I wanted to, take a car for rent and work until I fell off my feet. 24 hours, two, three. Sometimes I fell asleep at the wheel, barely drove a passenger to point B, drove off and slept for an hour. I rested and went on to work again. After the incident, when the driver fell asleep at the wheel and ran over pedestrians, a 16-hour limit was imposed. But did not take into account that for 16 hours the drivers could stand idle and not follow the plan”, said Maxim

A person from Yandex.Taxi said that services realize the situation, but it is hard to keep drivers from being overworked.

“[…] drivers do not have to overwork, but it is hard enough to control. Officially, they introduced a shift limit, if I am not mistaken, the driver cannot work more than 16 hours, but even 16 is a lot. Ideally, now from different services data is impersonally transferred to the Department of Transport […] but the Department of Transport is not able to process such a huge amount of data, so drivers can still work hard, bypassing the systems in different ways.”

Drivers' overwork is a serious problem, as well as for the drivers themselves: problems with mental and physical health may appear, which even one of the respondents stated, as well as for passengers: drivers get tired and there is a greater chance to get into an accident. Cases when drivers fell asleep at the wheel were happened already, even with fatal consequences. The work and rest regime should be strictly regulated. The aggregators tried to limit the working hours of the person via application block after 16 hours, but then, if desired, the driver could simply switch to another service and continue working. The state became involved and in Moscow the transport department began to collect information about the drivers from all services and control their work, but according to the answers above - it also works badly, moreover it works in region only. For safety, work and rest must be strictly controlled by the governmental regulations, creating a single system for all Russia and the capacity to handle it. Furthermore, the reasons for processing often arise from the fact that drivers do not get enough money at normalized schedule (as it is stated in some interviews with drivers), so the above mentioned solution of the problem with payment (minimum payment, limitation on commission, etc.) will not force drivers to overwork.

Support problems

If drivers have any problems with service: technical problems, payment issues, conflicts with passengers, or other, they should contact the aggregator support. Each aggregator works in its own way, everyone has a support chat, but not everyone has a phone line available. The problem is that some drivers noticed that it may take days to get an appropriate answer to their problem Nikolay, the driver, said “Support other than promotional code will not give you anything”, he adds:

“Aggregators do not hear; complaints do not get to the top. They've got their bots answering the drivers.”

But a person from Yandex.Taxi in the interview said, that “In case of an emergency, drivers always can contact support through "emergency assistance", this feature is available both for drivers and passengers.”

According to the interview with Gett representative, services understand their need in establishing trustful relationship with drivers, but each correction may lead to churn of the passengers and drivers, and it is hard to make something.

“In the field of taxis, a closed circle and it is difficult to introduce any strong innovations for drivers or users. Every action can reduce the number of drivers or users. And vice versa, working with drivers is difficult. And support - it is very important, even critically, on its life expectancy of the driver in service can depend.”

Conflicts with passengers

Another problem covered is inadequate passengers. Some drivers say that sometimes passengers think that if they are in a taxi, they should be fully serviced, even though they are going by the cheapest tariff. Sometimes it can be a verbal conflict over a little thing, sometimes there are serious threats. Drivers believe that this is another negative side of low cost of travel; for some people, especially in the company of friends, it is cheaper and faster than riding on public transport. Because of this cheapness, absolutely anyone can take a taxi. “For many of them, taxi drivers are a poor profession, and all the problems that taxi drivers have are their own fault”, said one of the taxi drivers, he also mentioned:

“Because of the decline in taxi prices, service problems begin to arise. Disagreements between driver and passenger appear […] driver takes the order from despair knowing that he will not get much from it, and the passenger thinks that he even pays a lot and behaves inappropriately […] I often began to meet customers, drug addicts, drunkards, these people need to be engaged in treatment, and they are in our taxi ride at a good price.”

Some of the drivers believe that this will continue to be the case not only because of low prices, but also because the government does not fully control this industry.

“[…] When conflicts occur, the passenger and driver resolve them on site. As the entrance to the taxi is simple, there may be both a tried and a mentally unhealthy person at the wheel, who was driven by previous passengers. And in such a chain, he must be the last person responsible for the carriage. He has no legal rights due to the laws that got him behind the wheel. The solution to the situation is simple - you have to lead all participants to the legal conduct of business.”

In interviews, drivers said that almost every driver has conflicts with passengers. There are several reasons for this: 1) The driver's profession is considered non-prestigious and passengers allow themselves such behavior, 2) The price of the trip is so low that people of marginal behavior can sit in a taxi 3) Because passengers know that in case of conflict, service will be on the passenger's side (fortunately, judging by the answers of the aggregator respondents, the services understand the importance of the driver and begin to follow the passengers too). An increase in the cost of travel, if the minimum price and other recommendations described above in this paper, may solve the first and second problems. But in general, these problems should be -, because the service has the ability to track all its passengers and on their travel history to understand whether they are consumer terrorists or not, in which case, such users should be blocked, protecting drivers from conflicting passengers, as well as being able to appeal the decision. In the opposite direction, this already works for drivers. Moreover, Yandex.Taxi has introduced passenger assessments, now after each trip drivers can also give a person a rating from one to five. According to respondents from aggregators, this is already a good step, but so far it does not make sense, the consequences for passengers in case of unacceptably low rating only at the stage of concepts, but it is already a good move that other aggregators can copy to themselves, and if these systems would have combined together from different aggregators, - it would be ideal, but there might appear transparency and appellation problems, because some service could subjectively block or unblock the client. The principle of blocking passengers is already working at airlines, but air companies faced with the fact that they need government regulation for this, the carrier cannot prohibit a person to fly only at will, a court is necessary. Perhaps this will be necessary here as well.

Insurance

Accidents on the road happen and all responsibility usually was on the driver, as the driver responsible for safety while driving, but in 2017, after the trial and serious proceedings with one of the passengers, that got into accident in 2016, Yandex.Taxi decided to insure every trip for 2 million rubles (RBK, 2017)

“Insurance is a sore subject for aggregators, but at some point Yandex.Taxi decided to insure every trip, both driver and passenger, soon other aggregators connected and now, if I am not mistaken, insurance is everywhere.”

This statement was confirmed by other of the respondents from aggregators and the situation was mentioned in the market overview of this paper.

Summing it up, before the introduction of taxi travel insurance, in case of an accident, passengers could not reimburse the damage in case of a taxi, all the blame lay on the driver. The services were justified by the fact that they were not carriers, but only an information service connecting the driver and the passenger. This fact has its reservations, for example, because a bona fide passenger believes that it is Yandex.Taxi that orders the carriage, and at least this obliges the aggregators to take measures to protect passengers and drivers. The regulation was made by the services themselves, when each trip was insured by Yandex.Taxi, and then by some other aggregators. But there must be a coregulation with state mechanisms, which would oblige all market players to insure trips by setting a minimum amount. Moreover, the insurance should be not only for the duration of the trip, as it is now, but for the duration of the entire driver's shift, including downtime.

Perception of aggregators

Perception of the taxi industry varies from person to person, from company to company. Some drivers worked in a period when taxis could be only ordered by hand or by telephone. In this block the author analyzed respondents' answers about drivers' opinion of modern work as a taxi driver, and whether they are able to build a healthy relationship with taxi aggregators.

Some drivers state that aggregators care only about passengers, “it is easier to them just to block the driver, because customer pays”, said one of the drivers.

“Yandex does not care that the passenger was drunk, swearing, there were some deeds, including national [aggression]. Yandex does not think about drivers at all and covers all antics of passengers. Now in Yandex there is a bilateral assessment of the passenger, but these assessments - placebo. At the most, they can make sure that this passenger is no longer caught by you (or vice versa). Each driver should be provided with a video recorder, which captures the interior of the car. In case of controversial points (where nothing can be done) - provide video recording to the aggregator, fine the passengers. Yandex is used to the fact that the large flow of people who want millions, spitting attitude […] After such long shifts, I started to have health problems, I became mentally unstable, so I quit.”

Several respondents from aggregators somehow confirmed this information, but as they stated, that was the case before, when the market was just emerging, then the services were on the customer side in most cases. Now the services realize that the driver is just as valuable as the passenger.

“If we used to be more passenger oriented, we have recently changed the policy, because drivers are also users, no less important. Because consumer terrorism exists, and we need to monitor it to make everyone feel comfortable. The passenger control system is still being worked out”, said a person from Yandex.Taxi

Perhaps this became especially clear after the scandals, when the passenger accused the driver of something, and then the video recorder from the taxi car revealed that it was slander. Also, according to the representatives of aggregators, it became clear that there are not so many good drivers in the market now, and the services try to keep the drivers, for this purpose, more comfortable working conditions are created, support is optimized, additional bonuses are given to the drivers' service.

“We have a desire to make the most customer-oriented service so that the driver stays with the service and not go to others. That's why the service is constantly developing and making concessions to keep the driver”, said a person from Yandex.Taxi

For example, some drivers complained that they want to see the destination point before they are at a passenger, and in Yandex.Taxi this is realized for the drivers with the highest loyalty score. But these rewards may not have a significant positive influence on a driver, at least this is stated by one of them:

“All virtual "rewards" do no good [for drivers]. One cancellation and point "B" is not visible. As soon as there is a new competitive player on the taxi market - expect a mass outflow of drivers. It is just a matter of time.”

There were also opinions that aggregators are just looking for investors and taxi drivers are “consumable material that can be easily replaced”, one of them has also said:

“Yandex doesn't do taxis, they do numbers. They care about passenger numbers, not quality. Yandex squeezes all juices from healthy people, 30-35 years old, and they lose health […] They need to be removed. I call them "a new kind of slave-holding”

Or Stanislav, one of the drivers, commented:

“No large aggregator sees the driver as part of the business, it is an expendable material - tires, if wiped - on the dump. All the rest is PR, and PR is cheap and is designed not for drivers, but to give seriousness of "business" for investors. The driver in the relationship with the aggregator looks first of all in his wallet and all these houses taxis and other tricks to his light bulb. Service is a cancerous tumor, they are not interested in the driver, because according to the service, there are as many drivers as category B driver's licenses in the country and neighboring countries. They are practically not interested in the passenger, because where he will go from the submarine, they are interested in the money of investors, for what they screw up trips.”

Somehow, among drivers who took a participation in the interview, there were some drivers who thinks that the situation is okay, and drivers are just complaining without reason:

“For some reason, no one strikes against [traditional] taxi companies, but blames everything on Yandex, which is funny itself. I have experience in a taxi for more than 13 years, I saw everything, at the moment Yandex is the best among aggregators and not everyone here needs a strong driver organization. Those who work make money. Issues about B point for a driver are known for a long time. You'll sit there and that's it, coming up with excuses “I am not going there”, “but the road is bad”, and “there is no tip”, etc. Guys in Yandex always fix everything very much better. You just have to work, not play cards on the hood of a car and say how bad it is. Life is changing.”

A driver, who is a student, also spoke well of his working experience in an aggregator, noting that it is better and more profitable than what people of his age usually do.

“I think it is a good job for a student, especially in his car. Compared to whom I used to work before, it [taxi] is a vacation. Usually students are movers, walking couriers, waiters and such a job for 12 hours a day. It is very difficult. And a taxi with a free schedule, you sit quietly in your car. It is not a dusty job, so to speak. I do not really want to get out of here”, said Michael

One of the respondents from the aggregator expressed a hypothesis that mainly negative opinions about taxi work and other problems arise among older generation drivers, especially those “who witnessed the taxi market in 1990-2010, where the taxi market was almost completely illegal, the place had to be paid for, and taxi drivers could drive any car and set unimaginably high prices. Young drivers see in working with the aggregator an opportunity to work at any time and on their own schedule and earn relatively decent money.” Two of other respondents from aggregators said that this hypothesis may be true, but there is no quantitative analysis of it yet, another two have not been interviewed on this issue.

Feedback and communication

Aggregators tend to talk with their drivers in order to increase their satisfaction, therefore prolong their lifetime in the service, keep worthy drivers.

“We have a desire to make the service as customer-oriented as possible, so that the driver will stay with the service and will not go to others. That's why the service is constantly developing and making concessions to keep the driver”, said Yandex.Taxi representative.

All services collect feedback from drivers in different ways. Most of the aggregators have monthly feedback collection forms, some are getting feedback from taxi park that have collected it from drivers.

For example, Yandex.Taxi has a program "Big Change", this program is similar to “180 days of changes” in Uber, when ride-hailing service are collecting feedback from drivers and on this basis are trying to solve the most popular emerging problems, successful changes every month are reported. This is what Yandex.Taxi representative said about it:

“Once a month we send a survey to drivers "how satisfied you are with the job", we think it can be done. Optionally, maybe it is a good idea to drive with drivers who have low levels of satisfaction and help them correct some mistakes.”

However, insider from the Citymobil critics “180 days of changes”:

“You have to understand that it does not work for drivers - it is just PR history. We want to have a more or less equal marketplace, we try to ask drivers what and how to improve the conditions of his service - most often financial instruments help, for example, we have subsidies for different cases.

But another person from Yandex.Taxi also said that is does not really work:

“[…] we've been working on it [“Big Change” project], but we have noticed that it does not make much difference if we raise the satisfaction index in Yandex.Taxi.”

Yandex.Taxi also has a monthly event where they invite drivers to talk about Yandex.Taxi and its new features for drivers and about problems that need to be solved.

“In addition, the Yandex team is trying to feel the driver's profession on its own and almost any of the employees can drive and shift to Yandex.Taxi, to understand by example what needs to be corrected”, said Yandex.Taxi representative.

In Citymobil it is Customer Satisfaction Level that drivers have to complete on onboarding and sometimes later with a Net Promotion Score, they also have a “House of Taxi” where all of their drivers may get together and have some rest.

The author asked aggregators' representatives about boycotts among the drivers and their communities in social network to understand how companies react to them and what actions they undertake.

“We follow those chat where taxi drivers are communicating about aggregators and planning boycotts. but abruptly, we take some of the messages out of there and transfer the data to the analytical center or development to improve the product”, said Citymobil representative

“And security service also monitoring these messages, because no one know what to expect”, adds another representative from Citymobil.

Unrest among drivers have happened repeatedly but have not ever affected on the work of aggregators, said Yandex.Taxi representative:

“Strikes in taxis have happened since the beginning of the service, but they are always too small and involve a small number of drivers. What's more, some drivers go on strike on purpose at this time as it is an opportunity to earn more. There were no serious cases of strikes or traffic blocking, taxi work. Once the drivers threw a smoke bomb in Yandex's office. The taxi, but it was a one-time action, and the intruder was detained.”

About other problems some services notified by non-direct communication with drivers, for example, Citymobil representative states: “We often understand about some issues from the videos of drivers on YouTube, we understand that somewhere we have a shortcoming and fix it.”

Perception of the market

Respondents that are working in the office of Yandex.Taxi, Gett and Citymobil stated that what used to be before aggregators entered the market and what is now absolutely two different taxi markets. If earlier it was necessary to wait for the car half an hour, the trip cost unreasonably expensive, and what car will arrive and what driver - it is unknown, now all is absolutely transparent, and the car approaches to the person for 2-3 minutes, moreover the taxi can be used now by the usual person, it is not necessary to have high earnings.

“About Uberization in Russia - it is obvious that everything has improved with the release of aggressors. The taxi market has grown by 10 times minimum; users can now quickly order a car and accurately calculate the cost of travel. The price has dropped significantly, so the taxi is now not only to go to the cinema once a month with a girl, but also on daily occasions. But utilization - yes, drivers began to earn less than when they bombed ten or twenty years ago for huge money on short distances, now downtime has decreased and became 80% loaded”, said Citymobil representative.

“We are taxi booking services, strategically trying to develop the history of equality, when the best situation is two sides, and the drivers and passengers. The driver has less downtime than it used to be, the passenger can leave any part of the city at any time and leave it inexpensively, safely.”

Relationship with the Government

This block of answers explains opinions about governmental regulations of ride-hailing services on the territory of the Russian Federation. According to the market overview in this paper above and some answers of the respondents, players of taxi market (both drivers and aggregators) have been waiting for changes in legislative environment for a long time, but they are still not updated, thus exposing drivers and services in uncertain situations. A person from Yandex.Taxi said:

“The state seems to be trying to start controlling the activities of aggregators more deeply, for example, they recently wanted to introduce a law on taxi aggregators, adding responsibility to them, as in 2011 was the last adopted law and the market has changed a lot since then. But so far, this is not going anywhere.”

There are many reasons for this, as well as the above-mentioned regulation of taxi drivers' work, giving them bonuses for official work: minimum wage, paid leave, normalized schedule. Hence, about responsibility, how disputable situations between the driver, the taxi company and the aggregator should be solved, who is responsible for the accidents and so on.

“For some reason, our profession has become like a janitor's job. Taxi driver's job is an increased source of danger, and if a janitor misses a pile with a broom - it is okay, and if the driver takes a wrong direction - it can be deplorable. That's why I think the profession will be regulated sooner or later and everything will be fine”, said one of the drivers.

“The task of aggregators is to deceive drivers and rob a client. The government organizes the protection of aggregators. All aggregators work outside the legal field.”

According to interview with a person from Yandex.Taxi, overall situation is comfortable in Russia to continue developing ride-hailing services and government is ready to talk.

“In general, services are comfortable in this environment. The state communicates with market players and comes to compromises. Not without sudden problems, of course - for example, suddenly the charter contract is not valid in Moscow for business class, the major players in losses. The Wheely, for example, was built only on business class.”

For now, the government does not seem to have any regulation of aggregators, allowing services to set their own rules, sometimes going beyond the ethical boundaries, despite the fact that the state has been expected to do so for several years.

Social Function

Aggregators also perform a social function in Russia in addition to their core job, which would be impossible in traditional business, but the examples that respondents from aggregators have mention in the interview were mainly related to coronavirus.

“Citimobile supports drivers and tries to help the society as a whole. For example, in a pandemic, Citimobil drives doctors, takes blood donors to save someone's life for free. If the driver was working during the pandemic and got sick, cannot work anymore, then we compensate this story, of course, after they confirm it with a medical documentation”, said a person from Citymobil.

Representative of Yandex.Taxi said, that the company started the project “The help is near” and spent more than 250 million rubles to help people during pandemic situation:

“Now Yandex is helping to fight the pandemic, more 250 million rubles has been allocated for this. Yandex.Taxi is transporting doctors and food to the people in need. In case a driver or courier gets sick, he will help them.”

These facts were also mentioned in the market overview, above in this paper.

But one of the drivers stated (and five other drivers confirmed it after) that all the things that aggregators are telling people about the help to drivers due to pandemic situation is just a nonentity, because they do some events, but just to talk about, the real situation is much worse.

“You will not get honest information from the aggregators. For them, it is all PR. For the service, having 1 point of delivery of 1 glove to a driver for a week is a fact of supporting drivers during a pandemic. But the point is at the airport, from which there are no orders, there is no point in going there on purpose. That is, there is virtually no help for the driver. They will say that they carry out disinfection of cars, but they will not say that drivers have to pay for it and stand in line for 2-4 hours. So, there are facts, but really nothing”, said Alexander

Trends

This is the last block of questions in which the author asked drivers and aggregator representatives about the forecast in this industry.

Some of the drivers surveyed believe that the era of aggregators should end one day, because drivers begin to boycott more than they do for now, due to harsh working conditions and low pay. There is also an opinion that only young drivers will be left in aggregators, as adults become unsuitable for them due to their health condition.

“Now the driver's age is rejuvenating, because they need a healthy body, adults cannot stand it”, said Anton

Some of drivers who dislikes the service will continue to work until there

“I do not trust the service at all - a big business machine […] That's why I am driving on the fake account. I am staying to work because that's my profession. Until there is a normal aggregator, we will cheat them, drive on fake accounts, sell forgotten phones in cars, and give nothing to anyone.”

And some drivers believe that there are big changes yet to come.

“The taxi revolution is about to happen, because the accident, rudeness, unprofessionalism”, said Igor.

But aggregators do not agree that something serious may happen because of this. There is also a boycott in social networks, and we see it, but there is no point in doing something, they [boycotts and unrests] have always been and will be”, said a person from an aggregator.

Additionally, when the author interviewed insiders from aggregators, there was a question about riots in France, if can something like this happen in Russia, a person from Yandex.Taxi stated:

“They [French drivers] had a culture like that, we do not have one. In Russia were Individuals, gypsy car drivers [unlicensed drivers], phone call cabs, and in one moment taxi drivers realized it was more convenient to use aggregators. There used to be a lot of downtime and limited orders before, because the users forgot the taxi's phone number. When Yandex came in, it was a super-comfortable aggregator. If you work, there's enough for everyone. In France, most likely just fears and misunderstanding, negative attitude to something new. It cannot be like that in Russia, because it would be inconvenient. In Russia, there are big aggregators that can give adequate money to drivers if they work.”

Other aggregators are also having a positive mood for the future of ride-hailing services in Russia. But for the healthy operation of the market and the safety of both drivers and passengers, it is required that some areas of the market are regulated by the state and new norms and requirements are introduced.

Conclusion

This paper reviewed the main mechanisms of the platforms where uberized companies in Russia and around the world are based, and their principles. Moreover, it reviewed the literature analyzing how services should be ethically managed and how these problems should be solved. Also, with the help of in-depth interviews it became clear what typical problems drivers face and why these problems need to be urgently solved, because often both mental and physical health of both drivers and passengers, and other players in the taxi market in Russia and in the world depend on them.

The taxi market is growing and overcoming barriers all over the world, facing challenges that need to be addressed. Growth will depend on whether companies comply with ethical standards and the government regulates companies so that everyone stays in the positive light. Even though In-depth interviews have provided important information about what is still underdeveloped in the Russian market, it is worth noting the limitations of this research: it is possible that people who were willing to have a participation in an interview from social networks were initially negative against services.

This research can support quantitative research of emerging problems with services and drivers in order to understand the regularities and confirm hypotheses on some or other identified problems, because the services will go out to other cities and countries where they do not yet exist, and it is important that they are ready for this entry.

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19. Analyz rynka taksi v Rossii v 2015-2019 godah (Analysis of the taxi market in Russia in 2015-2019) (2020). BusinessStat.

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