Taxi Services Go Local

Law as an Instrument of Industrial Policy

The federal law on taxi localization stipulates that starting March 1, 2026, only vehicles meeting established localization requirements or manufactured under special investment contracts (SPICs) signed between 2022 and 2025 will be eligible for inclusion in the taxi registry. Kaliningrad Oblast and Siberia have been granted an extension until 2028, while the Far East has until 2030. From 2033 onward, the localization level will become the sole criterion for admission.

The regional registry is not a tool for aggregators, but rather a state mechanism for licensing taxi operations. It records the right of a specific carrier and vehicle to provide transportation services, ensures oversight of insurance, technical inspections and vehicle compliance, and forms the industry's tax and statistical base. The presence of "gray" taxi drivers doesn't diminish its significance: the registry regulates the legal segment of the market, through which the bulk of orders flow. Moreover, following adoption of the localization law, it's precisely through the mechanism of including or excluding vehicles from the registry that the state effectively manages the structure of the taxi fleet and creates guaranteed demand for certain models.

The official rationale: supporting domestic automakers and reducing dependence on imported components. In reality, this is about securing guaranteed demand for localized models in one of the largest corporate segments—taxis.

According to estimates from the Ministry of Industry and Trade, more than 1 million vehicles are engaged in taxi transportation in Russia. Until recently, a significant portion of this fleet consisted of Kia Rio, Hyundai Solaris, and Volkswagen Polo models—cars that are optimal in terms of ownership costs, durability, and resale value.

Leasing, Registry, and "The Last Train"

The key adaptation mechanism is leasing. A significant portion of taxi vehicles were acquired through leasing arrangements. The completion of a lease agreement means a change of ownership, which could affect the vehicle's status in the taxi registry.

According to analysts, taxi fleets are rushing to re-register vehicles before the law takes effect in order to keep them in the registry. Formally, this looks like a secondary market transaction; in reality, it's re-registration within the industry.

Some experts describe what's happening as "an attempt to jump on a departing train": to preserve the operation of foreign cars that won't make it onto the list of approved purchases after March 1.

Industry association representatives point out that no mass sell-off of fleets is occurring. Vehicles already entered in the registry will be able to continue operating even after the law takes effect. Furthermore, amendments allow for a vehicle's return to the registry upon change of ownership.

What Changes After March 1

The main change affects new registry entries. Vehicles that don't meet localization requirements will not be permitted for taxi use. This means: a shift in procurement structure toward localized models, increased capital expenditures for taxi fleets, and consequently, higher prices for taxi users.

Today's popular taxi models are valued for their low maintenance costs and strong residual demand. Replacing them with alternatives featuring higher localization levels could alter the per-trip cost structure.

According to estimates by the Analytical Center under the Russian government, in an unfavorable scenario the industry could face an exodus of drivers unwilling to upgrade their fleets. Industry experts cite a risk range of up to several hundred thousand people, though the actual scale will depend on the list of models deemed compliant with the requirements.

However, the changes may create conditions for expansion of the "gray" taxi market segment. Some drivers whose vehicles fail to meet localization requirements will likely prefer to continue operating outside the official registry rather than invest in vehicle replacement—especially given the high depreciation rate of the existing fleet and limited financial capacity.

Benefits for automakers—risks for the service market

From an industrial policy standpoint, the law creates sustained corporate demand for localized vehicles. For manufacturers, this is a long-term positive: the taxi segment provides large-volume purchases and rapid turnover.

However, for the transportation market, the consequences are mixed:

• possible fare increases due to higher costs;
• in the short term—a shortage of suitable vehicles;
• increased pressure on small carriers and self-employed drivers;
• threats to the life and health of passengers choosing "gray" taxi drivers.

Passengers won't feel the effect immediately, but changes to the fleet structure will inevitably impact average trip costs and service availability.

The market draws conclusions ahead of the regulator

The taxi localization law was conceived as a tool to support domestic industry. But even at the stage of preparing for its entry into force, it has become a factor influencing the structure of the secondary market.

The main question now is how quickly the industry will adapt to the new requirements and whether it will be possible to maintain a balance between industrial policy objectives and transportation affordability. The market will begin getting an answer to this question as early as 2026.