Coming out of the shadow: Tatarstan lobbying for bill to remove restrictions for self-employed taxi drivers

Current legislation does not allow private carriers to provide services without registering as an individual entrepreneur, but aggregators turn a blind eye to this

Coming out of the shadow: Tatarstan lobbying for bill to remove restrictions for self-employed taxi drivers
Photo: Maksim Platonov

A year ago, Prime Minister of Tatarstan Aleksey Pesoshin called for more active transfer of taxi drivers to the status of self-employed in accordance with the new tax regime that Tatarstan is implementing as part of a pilot project. As Realnoe Vremya found out, over the past year, the number of self-employed private carriers in the republic has increased significantly — up to 10,000 people, according to the ministry of transport of the Republic of Tatarstan. However, they could be more, but the current law on taxis prevents this as much as possible, not allowing individuals to get a license to transport passengers. They are trying to solve the problem through a new bill, co-authored by the Tatarstan parliamentarian.

“Self-employment as such is not available for taxi drivers”

Despite official data, not all taxi companies have noticed progress in converting taxi drivers to self-employed. As Pavel Stennikov, the head of the press service of Maxim taxi ordering service, told Realnoe Vremya, the reason for this is the current 69th Federal bill on taxis, which does not allow the issuance of a permit for transportation to individuals. Legally, a person can become a self-employed taxi driver and pay tax on professional activities only if they are registered as an individual entrepreneur. This contradicts the very principle of self-employment, which was conceived as a tool to simplify the legalization of microbusiness as much as possible, experts say.

“Self-employment as such is not available for taxi drivers today. A private driver is still not allowed to legally provide transportation services. Yes, there is an option for a driver who is registered as an individual entrepreneur to switch to the new tax regime, but this is not the self-employment that has been originally discussed. That is, by and large, nothing has changed over the year of the experiment with self-employment for taxis," Pavel Stennikov concludes.

“The industry is waiting for permission from the state to issue a license to individuals. This will not only legalize the market but also increase the income of drivers. Now they are forced to use the services of intermediaries, but it costs money, " he believes.

Liana Pakhareva, the director general of the Tatarstan Centre for Support of the Self-employed ANO, confirms that a taxi driver can become self-employed only if he or she is pre-registered as an individual entrepreneur, but does not see a big problem in this.

“Now there are many services that allows you to register as an individual entrepreneur quickly in a day, and then using the app 'My tax' to go to the tax regime for self-employed," said Pakhareva.

Experts for legalization of taxi drivers-individuals

Venera Kamalova, the acting commissioner for the protection of entrepreneurs' rights for the president of the Republic of Tatarstan, told Realnoe Vremya that there are indeed restrictions on self-employment for taxi drivers, but the draft amendments to the legislation on taxis are already ready and under consideration.

“Indeed, today self-employed taxi drivers are faced with a systemic problem of legislation — they, as individuals, cannot get permission to carry out activities for the transportation of passengers and luggage by passenger taxi. The law in principle does not give them such an opportunity — only an official individual entrepreneur can get a permit. The transportation market filled this gap through what is known as “rental scheme”, when an organization or individual entrepreneur rents a vehicle from an individual, gets the necessary permission for it to be transported, and then the driver actually works independently," Kamalova said. “However, the lack of a unified approach to regulating the legal status of the self-employed limits the opportunities for developing self-employment in the taxi industry. A draft of amendments to the law that allow self-employed individuals to obtain taxi work permits is currently under consideration by federal agencies.

The same point of view is held in the popular aggregator Yandex.Taxi.

“The number of taxi drivers who want to register as self-employed may increase if the legislation on the results of the experiment makes the next logical step — the possibility for self-employed people to get a taxi work permit for their private car. This will make the status even more convenient for a large number of Russians employed in taxis," Pyotr Didenko, the director of strategic projects at Yandex.Taxi believes.

Russia's ministry of transport against

The draft bill in question has already been brought before the State Duma. As one of its authors, Ayrat Farrakhov, a deputy from Tatarstan, told Realnoe Vremya, the document has already been approved by the Presidential Administration and taxi aggregators, and is now being approved in the regions. This process will take some time, but Farrakhov believes that the bill has every chance of being adopted by the end of the year. However, the document met with some opposition from the federal ministry of Transport.

“The ministry of transport [of the Russian Federation] is against the fact that self-employed individuals can get permits to work in a taxi. The agency is afraid that this may cause problems because they believe that individuals are not responsible enough. But we think that the inability to get a license is due to that the taxi market today is a rather “gray” zone: half of drivers work illegally, and everybody knows about it," Farrakhov argues.

“They do not want to register as an individual entrepreneur because it involves some bureaucratic difficulties and reporting. It is much easier to become self-employed, everything is reported online. I think it is a mistake to assume that responsibility somehow depends on the presence of the individual entrepreneur's status. Our bill will help to make the market more transparent.

Despite restrictions, the number of self-employed taxi drivers is growing

But until the amendments are adopted, the private passenger transportation industry is forced to develop spontaneously and, to some extent, illegally. And the self-employment tool plays an important role in this process.

First, despite legal restrictions, the number of self-employed taxi drivers is growing. If a year ago the largest aggregator in Russia Yandex.Taxi reported to Realnoe Vremya about 1,200 self-employed taxi drivers working in Tatarstan, then now, according to the republican ministry of transport, there are more than 10,000 of them.

“This is more than 15 per cent of registered self-employed in the republic as a whole (more than 64,000 people)," the press service of the ministry clarified to Realnoe Vremya. “In Tatarstan, there was a serious task — to attract self-employed people to participate in the project as much as possible. The ministry of transport and road management of the Republic of Tatarstan has the opportunity to “take out from the shadow” persons who provide services for the transportation of passengers by private vehicles (taxi drivers).

In Yandex.Taxi, the number of self-employed taxi drivers fulfilling customer orders has grown to 107,000 throughout the country.

“Yandex.Taxi was the first federal partner of the Federal Tax Service to connect the self-employed. According to the latest data, in Russia more than 107,000 self-employed driver partners fulfill orders of Yandex.Taxi. In total, about 400,000 self-employed people are registered in Russia. The company is actively working to connect self-employed taxi drivers to the platform in the Republic of Tatarstan, in particular, now this opportunity has appeared not only for taxi drivers but also for couriers who work with the Yandex.Food," said Pyotr Didenko.

In Yandex.Taxi, the number of self-employed taxi drivers fulfilling customer orders has grown to 107,000 throughout the country. Photo: Maksim Platonov

Drivers break the law, aggregators turn a blind eye

Meanwhile, according to information received by Realnoe Vremya from self-employed taxi drivers themselves who fulfill the orders of users of the popular aggregator, the latter provides drivers with a technical opportunity to engage in transportation without registration as an individual entrepreneur and even without a work permit. It is enough to have a self-employed status, which is provided for by the mobile app for taxi drivers via a link with My Tax app. The presence of the status is not checked, although the aggregator indicates its need on its website: we've warned you, they say.

“It is not a problem to register, the aggregator makes it possible to register ащк self-employed, but the person in this case works at their own risk, illegally, violating the 69th Federal bill," says a self-employed taxi driver interlocutor of Realnoe Vremya who asked for obvious reasons not to call him. “There is no need to get a permit in Kazan to register as a self-employed person and fulfill orders. In fact, any person from the street, having a passport and driver's license, can connect and work quietly.”

“In fact, no one controls taxi drivers. The aggregator asks you to upload a photo of the car and interior, a driver's license, and sometimes a driver's face to the app about once a week. That's the whole control," the source of Realnoe Vremya continues. “All the raids aimed at suppressing the activities of illegal taxi drivers are just window dressing. I have been driving since 2014, and no one has ever asked me to register as an individual entrepreneur, work permit, etc.

The appearance of self-employed taxi drivers is the first step to bring order to the industry. Photo:

The press service of the aggregator in question denies the existence of such a connection scheme for drivers: they say that when registering, the programme requires you to download a work permit, among other necessary documents, but, as taxi drivers assure us, this restriction applies only in Moscow.

According to our interlocutor, the appearance of self-employed taxi drivers is the first step to restore order in the industry, since the registration of individuals as legal cabs will allow us to exclude the client-aggregator-driver services from the chain and will send taxes to taxi drivers exclusively to the budget.

By Vitaly Akhmerov