Russian Parliament Passes Law Forcing Taxi Drivers to Switch to Domestically Produced Vehicles

The State Duma (the Russian Parliament) has passed the controversial bill on the localization of vehicles used as passenger taxis in both the second and third readings, despite strong criticism from relevant associations, business groups, and the government, TASS reports.

The bill had its first reading back in January 2024. When presenting it for the second reading, State Duma Speaker Vyacheslav Volodin admitted that the draft law was initially very underdeveloped, so the “relevant committee, together with the responsible ministry, other stakeholders, and most importantly, with representatives of the industry,” had to completely revise it.

However, Natalia Lozinskaya, Executive Director of the National Taxi Council, noted that in the final version, all business proposals were ignored. Meanwhile, the Analytical Center under the Russian Government warned that the adoption of the bill could result in up to half of taxi drivers leaving the sector due to an inability to afford Russian-made vehicles, causing a sharp rise in prices and a decline in service quality.

The final version of the bill outlines two ways for a vehicle to be included in the official taxi registry. First, the vehicle must exceed a government-defined localization score threshold (currently 3,200 points). Second, the vehicle must be manufactured under a special investment contract signed between March 1, 2022, and March 1, 2025. Starting January 1, 2033, only the localization score will be considered.

The law will take effect on March 1, 2026. However, implementation will be delayed to March 1, 2028, for Kaliningrad and Siberia, and to March 1, 2030, for the Russian Far East.

Russian automotive giant AvtoVAZ remains the main lobbyist for the initiative as the company is expected to receive the bulk of procurement contracts. The company has faced a dramatic decline in vehicle sales, and its near-monopoly in the taxi market will allow it to secure annual demand of 40,000 to 60,000 vehicles.