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Alternative “Private” Transportation Services

Alternative “Private” Transportation Services

Turkiye
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Istanbul, as one of the most populated cities in the world with a population of almost 15 million people, uses various modes of public transportation which are metro, light rail, funicular, tram, suburban train, bus rapid transit, highway bus, sea bus, and ferryboat. Apart from these modes of public transportation, people in Istanbul often use private transportation which might be listed as private car, private highway bus, taxi, and sea taxi. 

According to Turkish Statistical Institute database, there are 21.454.288 registered motor vehicles in Turkey. Only 7,5% of these vehicles are used for commercial purposes and almost 90% of it consist of private vehicles.

As an alternative to the traditional transportation methods, innovative application-based taxi and car services are getting more popular. Considering that the quantity and quality of traditional taxis fail to satisfy passengers’, especially tourists, demands on the expected-quality of transportation, such enterprises offer the opportunity to reserve vehicles for future travels and provides a road-map for desired destination. These transportation methods are based on a freelance model where the registered drivers to the company are free to determine when and where they can drive. Application-based transportation services simplifies ordering and payment processes thanks to the wire-transfer systems installed in the vehicles. Even for an instant order, synchronized location detection services make it easier to calculate the arrival time of the vehicle and reduce the uncertainty whether a cab will appear or not. Besides all these pros, there are several cons to be considered when it comes to the vague legal transportation regulations in Turkey.

Background

As soon as application-based transportation services entered into the market in Turkey in 2014, Istanbul Taxi Drivers Chamber of Artisans and Association of Turkish Travel Agencies immediately started to protest similar to their fellows/associates in other countries such as France and other countries. Taxi drivers alleged that application-based travel service activities are out of the scope of laws and regulations since the vehicles used in such activities are not licensed and vehicles’ drivers are not tax-payers.

Although it was not based on any provision of law, Istanbul Metropolitan Municipality Transportation Department published a decision dated 27.08.2014 which allows passenger transportation with luxury cars. The decision aims to regulate and resolve the problems and establish a standardization for the passenger transportation by luxury automobiles in İstanbul. However Association of Turkish Travel Agencies has filed a lawsuit for the cancellation of this decision due to the ground that luxury travel services may lead unfair competition and tax evasion and the court suspended execution of the said Istanbul Metropolitan Municipality Transportation Department decision.

Current Status

Nowadays, application-based transportation companies provide two types of services. First one connects passengers with drivers of luxury vehicles for hire via Smartphone app and pay based on company tariff. They make an agreement with passenger by virtue of D2 licenses they possess. In the second one, passengers call standard yellow taxis via Smartphone app and pay based on taximeter which is regulated by Metropolitan Municipality Transportation Department. Both cars are reserved by using the mobile app, and customers can track their reserved car’s location. 

According to transportation regulations, there are totally 37 different types of licence for passengers and cargo transportation however with draft regulation it is expected only 13 different types of Licenses. Drivers who transport passengers without a license and owners of such vehicles are deemed as “pirates” and are exposed to certain risks under Turkish law. Generally, application-based transportation drivers are alleged to be “pirates” however most of the drivers and cars fined by the police are actually license holders. Furthermore, apart from the driver, also passengers are obliged to pay fines from time to time. These fines are usually brought to courts by the drivers and the companies and most of the court decisions are nowadays tend to decide in favour of the drivers that use such technology. 

While these legal controversies on alternative transportation services became a hot topic on the agenda, Istanbul Metropolitan Municipality took a revolutionary step by launching the “I-taksi” application which actually functions as same as the new actors of transportation services. I-taksi application provides different models of taxis and payment method via İstanbul Kart which is the public transportation card used in İstanbul and it is recently criticised due to the ground that municipalities should not act like a entrepreneurs and not compete with them within such a new-born market but instead show efforts to regulate it. 

Conclusion or a New Beginning

New actors of transportation sector are enhancing public welfare by offering affordable and safe rides. Presence of these companies are also regarded as essential and inevitable part of the free market economy and competition which also serves as a comfortable method of transportation for tourists etc. that enhances satisfaction of foreigners starting from İstanbul. We firmly believe that, for the benefit of the public, legislative authorities will adopt a consumer-oriented approach which provides legislative infrastructure, harmonizes and transforms applications according to needs, and facilitates the use of new-technologies in accordance with the free-economy principle. Therefore, we indeed should not “park” here but quite in the contrary, we should “hit the road” and observe how this sector and legislation will evolve in time.

By Efe Kınıkoglu, Partner, and Ipek Asikoglu, Associate, Moral Law Firm

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