In the next three years, Serbian taxi drivers will be able to purchase new vehicles for which the state will give them 8,000 euros each, based on a regulation adopted by the Serbian government.
The regulation is a consequence of this year’s agreement between the taxi driver and the president of Serbia, Aleksandar Vucic, which came after several days of protests during which a complete traffic collapse caused the closure of the busiest city streets in Belgrade. Taxi associations are pleased with this regulation because they say that the state has recognized the importance of rolling stock replacement for several reasons.
– Clients will get better service, more secure. It is also important to reduce emissions to the Euro 6 standard. This is a big deal if one knows that there are 6,000 taxi vehicles in Belgrade alone. Let each of them travel 150 kilometers each, which is the equivalent of 60,000 vehicles at any given time. Therefore, the regulation is extremely important from an environmental point of view – Aleksandar Bjelic, president of the Taxi Association of Serbia, told Danas.
He claims that the regulation stipulates that the price of a new vehicle should not be less than 13,000 euros, because “it would not be right for the state to buy vehicles for them” and that the amount prescribed implies “significant participation of taxi drivers”, is a guarantee that quality of service will be raised.
He thinks it is unrealistic to estimate from the ordinance that in the next three years, at the rate of 6,000 subsidies a year, the practically complete fleet of Serbian taxi drivers should be replaced.
– We pointed it out, but the Government had to come up with a document in this form. However, of the 17,500 registered taxi drivers in Serbia, at least 3,000 to 4,000 of them cannot meet the requirements because their debts exceed 5,000 euros. Some may settle their obligations during the regulation, but this will not have much impact, as the number of those who will retire soon is increasing and they are not even interested in buying a new vehicle. In any case, I don’t think more than 12,000 people will take advantage of this measure – says Bjelic.
The calculation shows that, if Bjelic is right, taxpayers will donate 96 million euros to taxi drivers for new cars, and if no taxi driver refuses a gift of 8,000 euros, the budget guild will go as much as 140 million euros. Recall that these 8,000 euros are even more than what was thought after the protests that was agreed at a meeting between taxi drivers and President Aleksandar Vucic, when the sum of 5,000 euros per vehicle was unofficially mentioned.
Economists do not fully agree on the effects of this move by the Serbian government. Professor at the Faculty of Economics in Belgrade, Ljubodrag Savic, says that the measure may seem unreasonable at first glance, but if it is taken as the first step in regulating the area, then it becomes meaningful.
According to Lubomir Madzar, the state was completely unnecessarily involved in this activity.
– Taxi drivers operate in the market, and there are no shortcomings in that market that would justify any special intervention by the state. On the contrary, that market only needs to regulate and open as wide as possible a door to new competition that will do what the Government cannot by its arbitrary decisions. So, this is another major obvious mistake of the Government, which has become involved in subsidizing the evidently market sector. This will in some way damage the new modes of transport, since the subsidies are directed only at those who already have work permits, maintains a monopoly in taxation and closes the possibility of introducing new competition, so that those with higher quality prevail. This is the logic of the market and this is the mechanism through which the market produced a miracle in economic development viewed from a long-term economic perspective – says Madzar.
He stresses that this type of subsidy should not be a job of the state, as it introduces discrimination against potential competitors. He says the measure is also harmful to consumers, anti-market and in line with what is often emphasized, that the government often does things it should not do instead of turning to functions that no one but them can perform, reports Danas.
