Russia’s deputy chair of the State Duma transport committee has urged caution over proposals to cap taxi fares during the New Year holidays, saying such limits could reduce the number of cars available and push drivers off the road. Pavel Fedyaev told reporters that administrative restrictions on maximum tariffs will be unattractive to drivers at times of peak demand, and many may choose not to work.
Fedyaev’s remarks, reported by Russian agencies, come as authorities and consumer advocates debate ways to prevent excessive surge pricing during high-demand periods. He warned that a rigid price ceiling would distort incentives, lead to a shortage of legal taxis, and encourage passengers to turn to informal or unregulated transport services.
Russia taxi price cap could reduce supply
According to Fedyaev, regions retain the right to regulate minimum fares to protect drivers from unsustainably low rates. However, he said maximum prices are best set by market forces that reflect demand, time of day and local conditions. If legislative caps make trips uneconomic, drivers may simply not log on to platforms or accept street hails, reducing availability for passengers.
Market participants and regional officials must weigh the trade-off between consumer protection and service availability. On one hand, passengers facing rapid price spikes during holiday rushes can suffer financially. On the other hand, setting a flat ceiling risks removing the price signals that encourage drivers to meet demand where and when it arises.
Fedyaev also emphasised the public-safety angle. He suggested that a shortage of regulated taxis could increase the volume of informal rides that lack oversight, insurance and quality controls, creating potential risks for passengers. Regulators, he argued, should consider measures that balance affordability with incentives for drivers to operate during busy periods.
Industry observers say alternative approaches could include targeted subsidies, temporary boosts to minimum fares, improved platform transparency and enforcing rules against predatory surge practices. Such measures aim to protect consumers while preserving the flexibility that allows drivers to respond to demand.
Regional authorities already vary in how they regulate taxi markets. Some set minimum fare levels to ensure drivers cover costs and remain in service. Fedyaev’s comments underline the view within parts of the Duma that heavy-handed caps on maximum prices would represent a blunt instrument likely to create unintended consequences.
As the holiday season approaches, the debate will test the balance between consumer protection and market efficiency in Russia’s taxi sector. Policymakers face a choice between short-term measures to limit spikes and longer-term reforms that stabilise the market while maintaining service levels for passengers.
For now, the Duma’s transport committee appears to favour preserving market mechanisms for setting maximum fares, coupled with regional control over minimums and additional safeguards to deter exploitative pricing.
Key Takeaways:
- Deputy Transport Committee chair warns a Russia taxi price cap during the New Year could make driving unprofitable.
- Officials say limiting fares risks fewer taxis on the road and a rise in illegal rides.
- Regions can set minimum fares, but maximum prices should reflect market demand and conditions.
