Recent findings from the Public Council for Taxi Development reveal a striking shift in Russia’s taxi sector: roughly 12% of taxi company owners are contemplating liquidation due to persistent unprofitability. This figure comes from a survey of more than 170 taxi businesses across the country, underscoring how widespread the current financial strain is for operators who rely on a steady rider base, predictable costs, and reliable vehicle fleets.
To put these numbers into perspective, the pandemic years 2020–2021 saw far fewer closures, with only about 8% of taxi firms considering winding down. The jump to 12% signals intensified pressure from a confluence of factors that have unfolded over the past few years, including supply chain disruptions, fluctuating fuel costs, and market competition that has intensified amidst economic headwinds.
The principal hurdle in 2022 has been the withdrawal of Western automakers from the Russian market, a disruption that sent ripples through fleet renewal plans. A staggering 81% of carriers reported difficulties obtaining parts or facing elevated prices for auto components. Compounding the challenge, fleet renewal support programs and incentives have shown uneven geographic reach, with Moscow appearing to be the only region where some renewal utilities have continued to function effectively. This geographic imbalance places additional strain on operators outside the capital, who must navigate higher maintenance costs and slower access to newer, more reliable vehicles.
Among the sector, 29% finished the year in the red, with the hardest hit being small-scale operators running fewer than 50 vehicles. These firms typically lack substantial reserves to weather a prolonged downturn, making them more vulnerable to market shocks. Meanwhile, about half of the fleet sits on the edge of viability, indicating that even those not yet financially distressed are operating in a precarious margin zone where small shifts in cost or demand could tip the balance toward insolvency.
Looking forward, several pressures are likely to shape the trajectory of the taxi industry. Vehicle life cycles are extending as operators delay upgrades, a trend that will inevitably push up maintenance and operation costs. At the same time, many firms continue to lean on rental agreements for Chinese-made cars, while some are weighing the purchase of electric vehicles from manufacturers based in Moscow or other domestic suppliers—choices that promise lower long-term fuel and upkeep expenses but require substantial initial investment and infrastructure upgrades. Given these dynamics, it is plausible that fare adjustments will be necessary to sustain service levels and cover rising overheads.
In this context, customers may notice modest to moderate increases in ride prices this year as operators recalibrate their pricing strategies to reflect higher ownership costs and continued uncertainty in parts supply. At the same time, operators are exploring efficiency improvements, driver incentives, and alternative procurement strategies to mitigate cost pressures while preserving service quality and safety standards.
Note: The evolving landscape suggests a need for policy attention, including more consistent access to essential vehicle parts, streamlined support for fleet renewal, and targeted programs that help smaller operators modernize their fleets without compromising financial stability.
A picture: Sergey Tarasov/Unsplash
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