Taxify threatens with end to ridesharing in Estonia

  • 2019-01-24
  • BNS/TBT Staff

TALLINN - The ridesharing service Taxify, one of Estonia's two unicorns, or companies estimated to be worth over a billion dollars, has threatened to wind up its business in Estonia should a bill imposing tougher requirements on ridesharing platforms take effect.  

The draft legislation being prepared at the Ministry of Economic Affairs and Communications would make providers of ridesharing service responsible for the quality of the service. More specifically, it would hold the platforms Taxify, Uber and Yandex responsible for making sure their drivers have a clean background, drive a car that is in good repair and make regular and correct insurance payments.

"A possible consequence of the amendment is the killing off of a necessary and innovative mode of transport and considerable social side-effects. In its current form, the amendment could lead to the disappearance of hobby drivers and part-time taxi drivers from the Estonian transport market," Taxify co-founder Markus Villig writes in a letter to Minister of Economic Affairs and Infrastructure Kadri Simson.

The amendment would obligate ridesharing platforms to share license card numbers with the register of economic activities to which insurance providers have access. The latter could then charge ridesharing drivers on par with taxi drivers when it comes to TPL insurance.

"The obligation to monitor the information that an information society service provider only forwards or to which it offers access cannot be placed on the service provider, just like the obligation shouldn't be placed on it to search for facts and circumstances indicating unlawful activity," Villig said.

He said that while in the taxi business all the obligations have been placed on drivers thus far, several shortfalls have been revealed in the system, such as the tax authority lacking adequate levers to check for the payment of taxes on the revenue earned and insurers lacking the understanding of whether cars are used for private purposes or also for the transportation of people as a service.