Could Uber offer Istanbul’s taxicabs a needed shakeup?

Could Uber offer Istanbul’s taxicab market the shake-up it desperately needs?
7 min read
24 March, 2018
Feature: The consumer discontent with Istanbul's taxicabs following a surge of customers switching to 'better' Uber services may be the shake-up the market needs, writes Charlie Faulkner.
Istanbul's taxicabs have become apprehensive over the 'better' Uber choice for some customers [Charlie Faulkner]
Istanbul’s taxicab drivers are the latest to find themselves embroiled in a fight against Uber – both legally and physically.

Already facing tough working conditions, regulated drivers say Uber has an unfair advantage over them and their livelihoods are at stake. However, considering the current taxicab industry’s reputation for poor service, some believe the ride-sharing company could be the shake-up the city is so desperately in need of. 

Forty-year-old Bahadır Goşkun has been a taxi driver in Istanbul for 20 years. Having grown up watching his uncle make a comfortable living from the profession Bahadır always wanted to follow in his footsteps.

Back then, it was an industry that offered an easy entry and a fruitful return, but these days conditions are very different.

The latest reality is that drivers must cover huge costs just to start their engines each day, the working hours are long, stress levels are high and now the threat of Uber could mean drivers face an even greater struggle to make a living. 

"I work a minimum of 12 hours per day, but today I’m on a 24-hour shift because I took a holiday yesterday. I can’t afford not to," Bahadır tells me as sits on a bench outside a taxi station in Istanbul’s Kadıköy district, smoking a cigarette. He looks tired – the kind of tired that needs more than just a good night’s sleep to rectify.

"I have a 12-year-old daughter and it costs me 1,000 TL ($251) per month just to put her through school. I only see her and my wife on Saturdays because I work 3pm until 3am six days a week – it’s tough." 

The Acibadem taxi station in Kadikoy is run by former driver Birol Istikbal and his wife Rehyan [Charlie Faulkner]

The government stopped issuing new plates in 1966. This has meant that despite the rapid growth of Istanbul’s population – increasing 6.5 times since the mid 1960s to 15 million people by the end of 2017 – the number of taxis in the city has remained stagnant at around 18,000. 

The increase in demand has led to the cost of plates spiking to 1.7 million TL ($427,000) compared to 335,000 TL ($84,000) in 2004, for example. Unable to pay for their own cars, drivers rent the vehicles for around 7,500 TL ($1,880) per month and cars are often shared between two or three drivers. 

"Each day I have to make around 320 TL ($80) before I break even. That’s 220 TL for rent on the car, 80 TL for fuel, 10 TL on insurance, 10 TL for cleaning and 6 TL for cigarettes," says Bahadır as he smiles sheepishly, acknowledging cigarettes do not really factor under car costs.  

"We can’t cope with the stress without our cigarettes," he says simply. "It’s so difficult to survive like this."

Halfway through the interview with The New Arab, Bahadır gets a call and dashes towards his cab. "I’ll be back but I have to go and make some money."

Unable to pay for their own cars, drivers rent the vehicles for around 7,500 TL ($1,880) per month and cars are often shared between two or three drivers

Istanbul’s taxi industry does not boast a good reputation with either locals or foreigners. Reports of rude and aggressive behaviour are notorious, as well as dangerous driving, and it is common practice for drivers to take the "long route" in order to bump up fairs.  

In a case that ended up in court last month, a Saudi tourist who took a taxi to Istanbul’s Sabiha Gökçen International Airport missed his flight because of a de-tour by the driver, according to Hurriyet Daily News.

Despite being on the same side as the airport, the taxi driver took his client across the Bosphorus Strait to the opposite side of the city. He looped around to the original side and eventually arrived at the airport. The driver, however, claimed he had taken the wrong exit to Yavuz Sultan Selim Bridge.

Taxi drivers like Bahadır in Istanbul find it hard to make ends meet with the industry's deteriorating reputation [Charlie Faulkner]

Keeping his word, Bahadır returns to the taxi station 20 minutes later.

"Drivers behave badly because it’s incredibly stressful to drive through the packed streets of Istanbul, especially for such long stretches of time," he says.

"We’re under pressure to reach destinations as quickly as possible because every second is money for us. This pressure isn’t good for the drivers or the customers, but what can we do?"

Cheap Fiats are often the vehicles of choice for Istanbul’s taxicabs and bumpers held on with gaffer tape – if still in place at all – or big patches of filler after knocks and scrapes, are not uncommon sights. The drivers do not have the time, the funds or the need to offer customers a high-quality style of car or to carry out repairs.

Bahadır continues: "And now we’re up against Uber. It’s completely different for Uber drivers. They don’t have to pay for plate costs, they just have to pay for the car. I could buy 10 Mercedes Benz Vitos used by Uber drivers for the price of a plate. That’s not fair. 

"They are working for themselves. They don’t have the same pressure to earn money like we do so they can take the time to dress nicely and offer a better quality of service to their customers. We can’t compete with that."

Tensions between the city’s 5,000 Uber drivers and its regulated drivers have escalated in recent weeks. Taxi drivers say the ride-sharing company is stealing their business and there have been multiple reports of violence

Tensions between the city’s 5,000 Uber drivers and its regulated drivers have escalated in recent weeks. Taxi drivers say the ride-sharing company is stealing their business and there have been multiple reports of violence aimed at Uber drivers. In one incident, shots were fired at an Uber driver while collecting customers – although no injuries were reported – according to Hurriyet Daily News

Last week, taxi drivers gathered in protest as the second hearing of a lawsuit against Uber was heard by an Istanbul court. The complaint, filed by Turkey’s United Taxi Drivers Association, has urged the government to block the ride-sharing company’s application to operate in Turkey. 

However, the added publicity appears to have only boosted Uber’s popularity within Istanbul. According to Uber Turkey data, the number of times the app had been downloaded swelled from 5,000 times the day before tensions broke out on March 6, to 24,500 on March 14, Daily Sabah reported. The case is due to resume on June 4.

Dr Tamer Cetin, professor of economics at Northeastern University in Boston, has studied taxicab markets in Istanbul and US. He believes Uber is a "game changer" for all taxicab markets.

"Uber has to be legal in Istanbul," he says. "It’s brought quality to the market for the first time. That was impossible before."

Uber has to be legal in Istanbul... It’s brought quality to the market for the first time. That was impossible before

Dr Cetin believes social regulations need to be implemented in Istanbul’s taxicab industry, entry restriction has to be reconsidered and fare controls re-examined.

"Generally, in today’s taxicab markets economic regulations, including entry restrictions and fare controls, are removed and social regulations regarding safety, security, environmental and the quality of service, are empowered," he says. "The case in Istanbul is reverse. That’s the biggest issue." 

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Dr Cetin also explains that the rapid increase in the price of taxi plates has turned them into investment tools.

"When supply is restricted while demand increases, the value of the restricted thing rises. This is where the today’s paralysed market structure starts," he says. 

"Today, the main component that dominates the market is rent-seeking activities. Plate owners have a strong lobbying power on the government."

He says his research has shown taxicab drivers and owners earn an artificial rent on taxi fares because the Istanbul Metropolitan Municipality determines taxi fares at a monopolistic price level – which leads to high fares. This is also the case in terms of plate prices. 

"From the perspective of economic regulation theory, there is a clear government failure in the Istanbul taxicab market," he says.

Meanwhile, regulated taxi drivers are calling on the government to issue more plates.

"The number of plates we have on the roads are not enough to keep up with demand," Bahadır says, exasperated. "We’re exhausted and stressed."

Drivers have suggested the government provide a further 7,000 plates which would be used for VIP taxis and offer a premium service.

Bahadır, along with other taxi drivers, would also like to see certifications introduced – initiatives to help drivers improve their English, their knowledge and their customer service. 

"Why doesn’t the government provide us with education to enable us to be better drivers?" he says. "Things need to change." 

The Istanbul Metropolitan Municipality had not responded to The New Arab’s request for comment at the time the article was published.

Charlie Faulkner is a British journalist based in Istanbul whose work focuses on migration and women's rights. Follow her on Twitter: @Charlie_Faulk