Changes in the Online Taxi Sector

The Ministry of Territorial Administration and Infrastructure is looking to take a new approach to regulate the passenger transportation sector through changes. The agency has developed a new draft law, a plan for changes to regulate the online taxi sector, including the acquisition of new types of licenses and steps to improve intercity traffic.

During discussions in the National Assembly on the topic “Current Issues and Solutions in Road Traffic,” Deputy Minister of Territorial Administration and Infrastructure Armen Simonian spoke about the draft law, outlining the areas of regulation, but did not provide detailed information. The Deputy Minister shared key points of the expected changes and new draft law with PanARMENIAN.Net.

In an interview with the media, he stated: “Online taxis should operate only with licensed drivers. Online taxis define themselves as intermediary organizations. This is acceptable, as they do not actually engage in the transportation of passengers—they accept orders and transfer them to the relevant company or driver who carries them out. In this regard, the main regulatory aim is for these companies to conduct their activities only with licensed organizations. In other words, according to the draft law, online taxis will not have the right to operate with any unlicensed driver or organization. Otherwise, they will be subject to administrative liability and fined. The main goal of this project is to bring everyone into the legislative field.”

Licenses for taxis must be categorized. In the draft law, we have differentiated the types of licenses. We have, conditionally, an F type license. The draft relates to individuals. Currently, this type of license is free, and it will remain free under the new law. In other words, one must only comply with the requirements of the “Law on Automobile Transportation.” Holders of this type of license are not allowed to operate as intermediaries—they cannot work with online taxis or intermediary companies. They can only find clients directly (that is, by finding customers on the street). Thus, a driver with a free license cannot work with an intermediary; to collaborate with an online service, they must act as an individual entrepreneur or LLC. Only after obtaining a license through organizations can they work with online platforms. The online platform, in turn, has the right to sign a contract only with licensed organizations or individuals.

Reducing state duties for existing and upcoming online taxis. According to the draft, notification of the authorized body—the Ministry of Territorial Administration and Infrastructure—is required to engage in the online taxi service. Currently, about 2,600 organizations are licensed in Armenia, and they pay state duty depending on the number of vehicles. With the new changes, these payments will be reduced, meaning that the fee for each vehicle’s insert (in addition to the license, there is also an insert) will decrease annually to 20,000 drams. I believe it will be appropriate for the business to move from the old licensed “zone” to the new one, given better conditions. Not moving is also their right.

Drivers of vehicles carrying 6-8 passengers will have to pay a licensing tax. The draft law also attempts to regulate the field of occasional passenger transportation. Thus, drivers of vehicles carrying 6-8 passengers engaged in regular passenger transportation will, according to the draft, have to pay a licensing tax, like microbuses and buses do. We want to bring everyone to an equal field, so that no one has preferential conditions. If a company has such a vehicle and engages in specific passenger transportation, they must pay the licensing tax. However, if 6-8 passenger vehicles are used for individual needs, of course, they do not need to pay.

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