Erdogan says Uber ‘finished’ in Turkey

A woman opens the UBER application on her mobile phone at the Eminonu district on March 30, 2018 in Istanbul. (AFP)
Updated 02 June 2018

Erdogan says Uber ‘finished’ in Turkey

  • Drivers of Istanbul’s yellow taxis have over the last months waged an intense campaign to have Uber banned
  • Erdogan said that while Uber may be popular in some European countries, Turkey was different

ISTANBUL: President Recep Tayyip Erdogan said the ride hailing app Uber is “finished” in Turkey, following intense pressure from Istanbul taxi drivers for the service to be banned.
Erdogan’s comments, in a late night speech Friday in Istanbul, came after the government agreed new rules that are expected to severely complicate Uber’s operations in Turkey.
Drivers of Istanbul’s yellow taxis have over the last months waged an intense campaign to have Uber banned, saying the company is eating into their business without having a proper legal basis for work.
“This thing emerged called Uber or Muber or whatever,” said Erdogan. “But this issue is now finished. It’s over now.”
“Our Prime Minister (Binali Yildirim) made the announcement. We have our system of taxis,” he added.
Yildirim’s government last month issued a directive sharply hiking fines and threatened blacklisting for companies whose vehicles illegally work as taxis.
The official taxi drivers association said at the time the measure would be a major threat to Uber, if it was properly enforced by the traffic police.
Erdogan said that while Uber may be popular in some European countries, Turkey was different.
“Why did it (Uber) emerge? Because it was in Europe. But what is Europe to me? We will take the decision ourselves.”
His comments come three weeks ahead of keenly-contested presidential and parliamentary elections. Many Istanbul taxi drivers — though not all — are strong Erdogan supporters and the main taxi associations back him.
The 17,400 official yellow taxis in Istanbul are a pillar of the city’s often patchy transport system, but critics say that poor quality service and overcharging have given Uber an opportunity.
The yellow taxi drivers, on the other hand, slam Uber as “pirates” who are swallowing their incomes in an already tight market.
Uber has said it is committed to working in Turkey and insisted it is operating within the law.
“We want to work in cooperation with all the relevant stakeholders to improve transportation options in Turkey and we are committed long-term to Turkey, to the end, as a loyal partner,” it said in a rare Turkish statement this week.
The tension in Turkey is one of a number of headaches for Uber and its new chief executive Dara Khosrowshahi, who took over last August after founder Travis Kalanick was ousted following a series of scandals.


Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.