Invincible City Bacteria
Caroline Skvortsova
Methodology Methods: • Econometric analysis • GIS maps • Interviews (both primary and secondary data) • Expert’s valua?ons Data collec7ons: • The Moscow Department for Transport • Fund of Public Opinion • Author’s valua?ons 3
Limita7ons of research • Limited numbers of variables for the empirical part of research • Rough es?mate of illegal sector (experts’ opinion) • Different views of ci?zens and governments to the problem of illegal taxis • The target model of the taxi market in terms of government • The need to compare with public transport
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Our people don’t take taxis to the bakery!
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«The Diamond Arm»
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Today’s taxi isn’t luxury
46% of all popula?on in Moscow takes taxis
Source: The Fund of Public Opinion
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Moscow taxi market 30% Legal taxis
30% 70%
70% Illegal taxis Generate ≈ $30 mln annually
Source: The Moscow Department for Transport
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Moscow taxi market
Driver as individual entrepreneur Individual drivers licensed to carry passengers
Taxi cab company as a legal en?ty
Dispatch service
Taxi companies with their own cars licensed to carry passengers
Companies without their own cars, but distribu?ng orders between drivers
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Segmenta7on of legal taxis For children
For disabled people
For women
Religious taxis
For animals
…and other thema?c taxis
Legal taxis can meet the specific demand, but now in Moscow is not enough capacity to meet the massive demand 9
Why did illegal taxis appear? P
Deman d
D>S
P Deman d
Supply
Opt
S>D
There is gap between supply and demand in the legal market taxis
Q
Supply
Opt
«Invisible hand» of the market. Gypsy cabs fill the gap between demand and supply
Q
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Hypothesis ques7on Сan the invisible hand of the taxi market regulate supply and demand or is strict government interven?on required?
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Why illegal taxi have a great share of the market? Black market taxis fill gap between demand and supply, as legal taxis have not enough capacity. As a result, taxi doesn’t arrive on ?me
Source: The Fund of Public Opinion
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Main problems Legal taxis
Illegal taxis
For passengers: • Low availability (especially «from border») • High rates for short trips • Low level of driver training For city: • Tax payment avoiding of slice of profit aher legaliza?on
For passengers: • Drivers don’t know the way and Russian language • Old and unequipped cars • Need to bargain and high probability of fraud For city: • Damage to the image of the city • Avoiding of tax payment For legal taxis: Compe??on
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World experience London
• •
Since 2002 «Safer Travel at Night» campaign Opera?onal headquarters «Transport Opera?onal Command Unit»
New York
• •
Medallion cabs and livery cabs Fine ≈100$ for each case of capture
Los-Angeles
• • •
Fine ≈1000$ (can be sent to prison) Confisca?on of cab Experiment «Hail a Taxi» -‐ special areas to catch a car.
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World experience Minsk
• •
Fine ≈1000$ (can be sent to prison) Confisca?on of cab
Mexico
Hong-Kong
• Confisca?on of cab ( 1400$ to return the car) • Can be sent to prison
•
• • •
Strict zoning system – for each territory special taxi color Fine from 600$ to 1300$ Can be sent to prison Driving ban
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Impact of illegal taxis on public space Posi7ve • Addi?onal effec?ve means of transporta?on • Discharge of public transport
Nega7ve • Damage to the image of the city (especially for tourists) • Frequent transport accidents with illegal taxis
• Risk of criminal offences
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Ci7zen’s view
Source: The Fund of Public Opinion
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Ci7zen’s view
Why do you take a taxi? City during the day City at night (bombila) City at night In the airport City during the day To drink In cases(school, shop) For business Solemn occasion On the railway station Own car repairs Out of the city Other
22% 17% 11% 11% 8% 7% 7% 5% 3% 3% 2% 2% 1%
Source: The Fund of Public Opinion
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Is informal always about compe77on? Type 1 Taxis, wai?ng at the hubs (sta?ons, malls, clubs) – example of hierarchy, monopoly
Type 2 Taxis, driving around the city – example of pure compe77on
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It is believed that the taxi market is ultra-‐ compe??ve market, but in certain areas -‐ it is a monopoly (for example, airports only work with 1-‐2 taxi companies), which leads to high prices, lower quality of services.
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Hypothesis ques7on for empirical research
What factors affect the concentra?on of taxis in certain areas of Moscow?
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Empirical research Assump?on: in general informal taxis are found mostly in the same areas as formal taxis. Therefore formal taxis serve as a good proxy for informal taxis.
Dependent variables: Taxis near hypermarkets Taxis near clubs Taxis profit
Independent variables: Retail areas Cultural areas Foreign Immigrant areas Student areas Industrial areas Sport Facili?es Leisure&Entertainment areas High density business areas Welfare areas
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Model results for variable 1: Taxis near hypermarkets Independent variable Influence Retail areas
There is a strong demand for taxis at these areas. Therefore these areas will require beoer facili?es for taxis like taxi parking zones, get-‐in and drop-‐off points for customers, customer informa?on points and other ameni?es for taxi drivers. It means that urban planning of hypermarkets should include good provision of taxi space.
Cultural areas
Nega?ve rela?onship with hypermarket areas. It means that hypermarkets are probably situated far away from districts with high cultural ac?vi?es. Cultural districts are found more towards the center of the city, while hypermarkets are found more towards the periphery. Large taxi spaces are not necessary in cultural areas.
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Model results for variable 1: Taxis near hypermarkets Independent variable Influence Foreign immigrant areas
Nega?ve rela?onship. This means that districts with many foreign immigrants are poorer areas and therefore do not aoract taxi services. Probably immigrant areas use cheaper informal taxis and public transport.
Student areas
Nega?ve rela?onship with student districts and formal taxis. Again, this probably means that student use the informal taxis. And illegal taxi drivers know where student campuses are situated, therefore they circulate there.
Industrial areas
Nega?ve rela?onship between industrial areas and hypermarkets. It simply means that the more industrial and are is, the less hypermarkets and retail will be found, and therefore there will be very liole formal taxis in these areas. Possibly industrial areas do make use of informal taxis.
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Taxis near hypermarkets
Hypermarkets are found more towards the periphery of the city. However, there is a strong demand for taxis at these areas. In general, legal taxis from hypermarket are prevailing, however during peak hours illegals try to compete.
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Model results for variable 2: Taxis near clubs Independent variable Influence Retail areas
Retail areas and clubs are strongly related. This simply means that the more retail found in an area the higher the probability of finding clubs in that area. Again this shows that formal taxis are found especially in retail and club areas. People who can afford to go to clubs probably use formal taxis more than informal taxis.
Sport facili?es
Areas with strong densi?es of clubs also have many sport facili?es. People using these func?ons also probably are wealthy and use formal taxi services more than informal taxis
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Taxis near clubs
Taxis near clubs are found towards both the periphery of the city as the center of the city. However, there is a strong demand for taxis at these areas, because it is connected with night transporta?on and taxi is one of the way to reach club or home. Near clubs legal taxis have high prices therefore there are gypsy cabs that are in demand.
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Model results for variable 3: Taxis profit
Independent variable
Influence
Wealthy business areas
The indicator that makes the most profits for formal taxis. This clearly shows that the rich people in rich districts use formal taxis. The second most important func?on for formal taxis to make profit. There are lots of clients with money in leisure and entertainment areas. These areas are probably less interes?ng for informal taxis
Leisure & Entertainment areas
Retail areas
The third most profitable type of district for formal taxis. People can prefer special legal taxis from hypermarkets.
Welfare areas
Areas with districts with a lot of welfare and social support (generally poorer areas) are nega?vely correlated with formal taxi profits. These are simply not aorac?ve districts for taxis. 28
Taxis profit
Taxis basically generate profits in the center, as the drivers set there are very high rates, knowing that there is always a demand, so it is the most desirable area for both legal and illegal for a taxi. Also, profitable zones are associated with the route to the airport.
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Future of Moscow
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Target volume of taxi market 1,5-‐2 mln passengers per day in the subway to work from 7 ?ll 10 am 1,1 mln households without a car 20 mln trips per year to / from airports
≈ 34 thousands of taxis
x2
≈ 6 thousands of taxis
100-‐110 thousands
50-‐55 thousands
≈ 13 thousands of taxis
Factors determining the need for a taxi: • the number of passengers in the subway to work • the number of households without a car • the number of trips a taxi to / from airports
Taxis
Drivers Source: The Moscow Department for Transport
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The target model of the taxi market in Moscow Element Provision of market Cars and taxi drivers Fare for trip Other elements
Current situa7on • Number of legal taxis ≈ 40 thousands • Share of illegal segment ≈ 70-‐75% • • • • •
Target model • Number of legal taxis ≈ 55 thousands • Share of illegal segment ≈ 0% Diverse fleet of taxis • Minimum range for taxis Low requirements to obtain a license • A clear set of requirements for taxi drivers Street fare is nego?ated on the spot • Common fare with increased Focus of legal taxis on long rides aorac?veness of short trips No • Insurance of passenger • Special zones of embarka?on / disembarka?on
Source: The Moscow Department for Transport
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Conclusion It is very important to determine the role of illegal taxis as a part of informal economy, their impact on the whole economy, on the city to develop measures for regula?on and improving city life
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