“Uber did not raised the fares after the new law” - Interview
As is known, nowadays Uber is one of the biggest startup projects that have contracts with thousands of drivers throughout the world and provides transportation services to millions of people every day.
It should be noted that Uber taxi dispatch software, connecting clients with drivers, is being used either for individual goals or by employees of different companies.
Uber Technologies Inc., that developed car transportation mobile app, has entered Azerbaijani market in 2015.
Start of Uber activities in Baku made a fuss about it and caused numerous discussions around.
Along with those happy with launch of Uber activities in Azerbaijan, there were some claims stating that Uber has low chances to succeed in this market, and will completely fail.
We have even heard some information stating that Uber was about to stop its activities in Azerbaijan for some reasons. Appointment of a new marketing manager to Uber Azerbaijan section confirmed the rumors even more.
However, nothing has happened and Uber kept on successfully operating in Azerbaijan. Thus, Uber tries to always be in trend and attract attention by realizing different campaigns and promo activities.
The recent important notice regarding the Uber is a change that has been made to Azerbaijan Tax Code.
The new law states that since all clients of Uber taxi services and drivers providing taxi services are in Azerbaijan, 18% VAT should be paid by Uber clients to state budget because the payment to Uber is considered as a payment to non-resident.
Xeberler.az has contacted Uber office for getting more information about company’s activities in Azerbaijan, its prospects and problems, as well as influence of the new taxation policy to Uber activities in the country.
Head of Communications, Russia & CIS at Uber Irina Gushchina has answered Xeberler.az questions.
- Irina, how do you assess Azerbaijan’s market? Do you think that our market has potential?
- Baku is the biggest economic and industrial centre of the South Caucasus. The opportunities that city provides attract people not only from Azerbaijan but also from near and far abroad. Due to constant growth of population and business development there is an increasing demand for comfortable transportation services. We see it from increasing need to Uber services. Nowadays, there is a still growing demand for taxi services. Therefore, it creates favorable conditions for further development.
- How do you estimate the population’s interest and demand for Uber? Did your company succeeded in attracting the attention and interest that was expected in Azerbaijan?
- Our service is steadily developing in Baku. At present, it takes less than 4 minutes to dispatch the car after ordering it through Uber mobile app. It means that we have enough partner drivers and orders from clients. I would like to note that if at the very beginning of Uber activities in Baku the most part of orders came from city center, nowadays Uber has orders from different parts of the city, including far ones. Generally, we are doing our best to provide townsmen with rapid, comfortable and safe taxi services to any route. Uber’s global experience shows that by increasing mobility of people we positively affect the city’s economic processes. Thus, labor fruitfulness of people as well as demand in small businesses’ services - restaurants, shops, cultural and resort centers, is steadily growing. In short, people’s life quality is getting much better. Our goal is to become a part of positive and dynamic changes of the city.
- Some time ago there were some claims stating that Uber was about to stop its business in Baku. It was stated that Uber partner drivers were no longer eager to work with Uber. What are the reasons for these rumors?
- Uber has started its activities in Azerbaijan in April 2015. We propose our partner drivers great opportunities to earn extra money. According to a number of indicators (for example car dispatch to client’s location), the number of our partners still grows. We are doing our best to make our cooperation with partner drivers comfortable and profitable for them. We don’t request them to exclusively join the Uber, they can spend only a certain time in Uber platform. Every driver decides how long to work in Uber platform. Flexible work schedule is very important for drivers. 75% of Uber drivers in Baku noted that flexible work schedule is the main advantage of cooperation with Uber. Baku is one of the main CIS cities for us, and we try to extend our participation here.
- Irina, what are the difficulties of your work in Azerbaijan?
- Undoubtedly, every market is specific and our team always takes it into account during developing efficient work strategy. I can surely say that active support of Azerbaijani Government to private enterprise facilitates much our partners activities in Baku.
- How many drivers have registered in Uber in Azerbaijan so far?
- According to our global policy, we never disclaim the number of our partners in a certain city. However, I can say that more than half a million drivers cooperate with Uber globally.
- How does Uber sign contracts with drivers in Azerbaijan? What are the main conditions? What are the criteria for becoming Uber driver?
- Uber proposes cooperation opportunities both to professional drivers and those willing to combine their permanent job with activities within the Uber platform. This is the great advantage presented by Uber to drivers. The main requirements for drivers are the following: you must be 21 years of age or older, you must have at least 2 years driving experience, you should have a car of year 2000 or newer, you should be able to work with navigator, you should know the city well, you must have valid documents: Drivers License, ID, insurance etc.
- Can Uber regulate its activities according to Azerbaijani legislation? Does the company face any problems concerning the tax issues? According to last decision, Uber clients will be liable to 18% VAT for using company’s services. We wonder how it will be regulated with cash payments. Generally, how the new decision can affect the Uber activities?
- Uber works strictly in accordance with current Azerbaijan legislation. I would like to especially stress that our company didn’t raised the fares after last changes to tax code.
- How many mobile app users does Uber have in Azerbaijan?
- According to company’s policy we never disclaim this type of information on certain sections. But I can say that globally 40 million people benefit from our services every month. Every day Uber makes about 5 million transportation services, and this figure is constantly rising.
- Do you have any plans to start activities in Azerbaijan regions?
- Business development and launching activities in other cities is one of the Uber priorities in CIS. Once we launch our activities in another city we’ll surely share this information with the general public.
- Recently, Uber has reached an agreement with a famous company on Self-Driving Cars. Will these cars be also presented in Baku?
- Uber always work on improving its technologies. Nowadays, one of the promising development areas is driverless vehicles, and our company started to work in this direction from 2015. Uber has already tested a driverless taxi in Pennsylvania.
Driverless transportation services can make much better people live, however it’s too early to speak about the real introduction of this technology in a certain town. According to statistics, about 1.3 million people die each year as a result of road traffic crashes, and the most part of these accidents are caused by human mistake. Driverless vehicles can decrease the number of fatal road accidents, support the efficient usage of road infrastructure, and thus to significantly reduce traffic jam.