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Home / Business / YANDEX Bankrupts Georgian Taxi Market Players

YANDEX Bankrupts Georgian Taxi Market Players

Taxi service is one of the widespread self-employment sectors in Georgia. There is no precise statistics, but according to specialists, about 50 000 taxi vehicles provide services in the country. A major part of these taxi vehicles are owned by private bodies and their activities are not regulated by state structures.

However, it is famous that Tbilisi City Hall is working on schemes for regulating taxi services. As a result, taxi drivers will have to satisfy specific requirements. Certain duties may be also introduced.

Because of absence of exact statistics on quantity of taxi vehicles, standard tariffs or  working schedule, it is difficult to say how much a taxi driver earns every day. However, according to specialists, daily minimum earnings are around 20-30 GEL, all expenditures deducted. Consequently, we should suppose that turnover in this business  is more than 100 million USD a year.

As to taxi service companies, there is heavy situation on the market. Russian Yandex Taxi has led Georgian companies to bankruptcy through dumping tariffs. The Russian company has not confined with  stealing clients and started enticing drivers too. Taxi service companies complain about reduced orders after Yandex Taxi appearance. As reported, Russian Yandex Taxi launched services in Tbilisi on August 23. It should be also noted that the company serves passengers through the lowest prices.

«Yandex Taxi Made about 47 Companies Bankrupt and then Absorbed Them»

Nika Khoperia, founder of 200-200 Taxi company, says that Yandex Taxi entered the market with dumping tariffs with the aim to eject all other companies from the  market and occupy monopolistic positions. Yandex Taxi covers 70% of the tariff itself to maintain the bottom margin on the market. Yandex Taxi is a big and strong company in terms of finances. As a result, it is capable for maintaining dumping prices for along period, Khoperia noted.

Almost all other taxi companies have disappeared from the market, because Yandex Taxi has made about 47 companies bankrupt and then absorbed them. As to the 200-200 company, its market ratio has dropped to 25% after Yandex Taxi entered the Georgian market, Khoperia said.

«Our efforts are vain. If I earn 57 billion one day, I will compete with them, not before. They are very strong in terms of finances. We will work to the end anyway», Khoperia said and added that the sector is not regulated.

Nika Khoperia also specified reasons he refrained from submitting an appeal against Yandex Taxi to Competition Agency. Yandex Taxi is not registered in Georgia and it is impossible to indicate its exact address and identification code.

«We specified our appeal once, but received it back. Competition Agency demands to indicate an exact address, while Yandex Taxi is not registered in Georgia. How can we indicate the address?»Khoperia asked.

Government of Georgia should protect domestic companies from dumping tariffs of foreign companies, the businessman noted.

«Yandex Taxi plans to eject

Georgian taxi companies from the market through dumping tariffs. Regretfully, we cannot compete with it by either vehicles or finances. Its finances account for several billions of USD. We cannot withstand their pressure. Even City Hall cannot assist us and nobody else», Bitashvili noted.

The 260-60-60 company has different position. Entrance of Yandex Taxi has made neither negative nor positive influence on the company performance. «We have our own numerous clients», the company representatives noted.

What plans the Russian taxi company follows in Georgia. Does it genuinely plan to eject Georgian taxi companies from the market entirely? The Caucasus Business Week (CBW) has applied to Yandex Taxi by these questions, but in vain. The company management remains unattainable.

Those who Let Yandex Taxi Enter Georgia should Be Punished

Zurab Bitashvili, head of Panta taxi company, also complains about reduced number of orders. Russian Yandex Taxi has made negative influence on Georgian market and the company revenues. Those, who let this company enter Georgian market, should be called to account, he said.

«This company has employed many citizens in Georgia»

Levan Gagunashvili, head of Taxi 112112 company, a Georgian partner of Yandex Taxi, noted that the 112112 company was on the verge of bankruptcy and therefore, decided to cooperate with the Russian company. «If I had refused this offer, others would accept it. Yandex Taxi made quite attractive financial offer to me», Gagunashvili noted.

Any company would apply dumping tariffs to get established on the market and there is nothing illogical in this decision. The Russian taxi company has employed many citizens in Georgia and this is a definitely positive fact, he added.

Similar noise around Yandex Tax is a little surprising, while 90% of taxi companies on Georgian market are Russian and Ukrainian, Elvan Gagunashvili noted.

This issue should be closed and taxi vehicles should be licensed, he said.

«Drivers should know how to communicate with passengers. They should not talk about politics and similar issues. Yandex Taxi plans to open its own training school and all companies will be able to train their drivers», Gagunashvili noted.

It should be noted that Georgia has become the fifth country following Belarus, Kazakhstan, Russia and Armenia , where the Russian company has introduced its application in Georgia, Russia and English languages.

Yandex Taxi cooperates with major taxi companies. The call system determines the location of a customer in automatic regime and directs the closest taxi vehicle to the client. The system comprises such components as selection of price category – econom, standard and business categories, as well as separate characteristics – nonsmoking driver, children clothes, air-conditioning and so on.

Yandex taxi needs about 10 minutes on averaged to reach the order place.

Online order services function in Georgia too, including by Ukrainian Uklon, which is an analogue of Uber services. Taxi Net, Agro Taxi, Taxify and other companies also provide online order services.

A certain part of Georgian society expressed protests against entrance of Yandex Taxi onto Georgian market, because Abkhazia and Tskhinvali Region were not marked as Georgian territories on the official website of the company. Later, the company corrected this mistake.