Mass Exit Of Migrant Workers Is Changing The Face Of Russia's Taxi Scene

The taxi part of the Russian tech company Yandex had a stark warning for the public and government last month: Thanks to the crackdown on migrants in Russia, taxi fares are about to get a lot more expensive.

Yandex is likely also concerned about threats to its business model, as the stipulations of a law on taxi services passed in 2023 come into effect this fall, with market shifts already visible.

But the mass exodus of foreigners, mostly from Central Asia, is already being felt in multiple sectors in the Russian economy after authorities launched a crackdown on migrants in the wake of a deadly attack on a concert hall near Moscow in March.

And while the ramp-up of raids and deportations has been bolstered by a fresh wave of migrant-phobia following that attack -- which left 145 people dead -- business representatives have been at pains to remind decision-makers that the country’s tight labor market desperately needs foreign workers.

Taxi Costs Rise

Nearly 93,000 people were deported from Russia in the first seven months of this year -- a 53 percent rise from the same period last year -- in a campaign mainly targeting Central Asians after Tajik citizens were implicated in the Crocus attack.

And around 143,000 people were denied entry to Russia from January through July, a significant spike from 2023, the Russian Interior Ministry reported.

The remains of the Crocus concert hall near Moscow after the deadly attack on March 29.

Ali, a Kyrgyz citizen and taxi driver, said in an interview with RFE/RL that deportations over alleged violations of vehicle registration have led to a massive reduction in drivers in Moscow.

Then there is the problem of the law on taxi services passed by the State Duma about one year ago, which is now in its implementation phase following a grace period.

Although the law applies to everyone wanting to work as a taxi driver, Central Asians might be justified in thinking that it applies to them even more than others.

Ali argues that it is the costs of conforming to the new law -- from burdensome new insurance payments to the cost of repainting their cars in line with the color coding chosen by provincial governments -- are driving many Central Asian migrants to quit the cab game en masse.

“I am also planning to leave Russia in the next month,” he said.

In the weeks and months after the worst attack of its kind in two decades in Russia, 19 Russian regions barred migrants from working as taxi drivers and in other public-facing services.

Those bans do not apply to natives of Kyrgyzstan, who are members of the Eurasian Economic Union (EEU), which also includes Armenia, Belarus, Kazakhstan, and Russia.

But they are hardly encouraging them to stay in a line of work that was previously easy to enter.

For migrants from Tajikistan and Uzbekistan, meanwhile, the new bureaucratization of the taxi industry as well as the heightened risk of discrimination -- even in regions where bans are not in force -- makes life behind the wheel an unattractive prospect.

Foreign workers register at a migration service center in Novosibirsk in May.

And with Russia’s ongoing war in Ukraine creating better paid jobs in the expanding defense industry, ethnic Russians are hardly racing to replace them.

That provides the context for the dire prognosis of Yandex Taxi’s government relations chief Anton Petrakov, who claimed during an economic forum in the Russian Far East city of Vladivostok in September that Russia will be suffering from a shortfall of around 130,000 taxi drivers.

“Fares will rise, they will differ from year to year by tens of percents,” Petrakov said, adding that the problem will not “solve itself.”

Other Sectors Hit

That appears to be already happening, at least in Moscow.

“Now prices have risen more than ever,” said Beksultan, another Kyrgyz taxi driver told RFE/RL. “For example, if we used to take people to the airport for 1,500-1,600 rubles, now we drive them for 2,000-2,500 rubles in the morning.”

Lawmakers in the Russian parliament are at least acknowledging that there is a problem.

That is why they are already talking about making amendments to the law that was passed last year to bring order to the taxi sector.

One proposal currently being entertained in the legislature is a cap on the commissions charged by “aggregators” -- i.e. Yandex -- at 20 percent.

What few, if any, Russian politicians seem ready to do is make life easier for migrants -- or even be caught saying they will do that.

In fact, this June saw a so far unsuccessful proposal aired to expand the bans imposed by the 19 Russian regions.

Back then, the taxi driver shortage was not so acute.

Central Asian taxi drivers say the costs of staying behind the wheel are increasing, and that is resulting in higher fares.

But in public transport, fewer migrants meant a slowing down of services.

"[Many] bus routes, even in large cities, are closed due to a shortage of drivers,” Vitaly Efimov, a member of the Duma’s Transport Committee, complained in August.

“It will be possible and desirable to ban [migrant labor] when we understand that a given sphere can function well without migrants," Efimov concluded.

For the restaurant business, meanwhile, it isn’t closures or more expensive meals that are the problem, but a shortage of people to cook and serve them.

In an interview with the Moscow-based newspaper Moskovskaya gazeta published in July, Sergei Mironov, Moscow restaurant ombudsman and founder of the Meat & Fish restaurant chain, complained that “zero unemployment” in Moscow made hiring locally almost impossible, with the situation broadly similar even in cities like Tula, nearly three hours from the capital.

“I’m not saying that Russia needs or doesn’t need labor migrants,” Mironov said. “But at the moment the restaurant sector does not have enough staff and this is impacting service quality.”

The debate around the taxi industry in Russia has, in the meantime, spawned no shortage of media commentaries calling for a return to the orderly state-owned taxicab parks of the Soviet era, when taxi driving was a “prestigious” profession.

But so far reports suggest the opposite is happening, with the digitization-advocacy group Digital Platforms last week sending an appeal to the government to urgently digitize the bureaucracy that taxi drivers are now wrapped up in, amid evidence of a sharp rise in the use of underground taxi services.

The group cited figures in its appeal that 234 groups and 29 chatbots had been registered on the Telegram platform for the purpose of cab-hailing and carpooling, with a further 3,800 services found on the Russian social network VKontakte.