How is the price of a taxi ride calculated?

In recent months, residents of Bishkek have increasingly noticed rising taxi prices. During rush hour or in rainy weather, the cost of a taxi ride through the Yandex Go aggregator can increase two to three times. Tilik Suleimanov, CEO of Yandex Go in Kyrgyzstan, spoke about the nuances of tariff formation.

The base price consists of three elements: the minimum boarding fee, the rate per kilometre, and the rate per minute of travel. Paid options are added to this, such as a car being sent from a long distance or the transport of large luggage. But the key element is the increased demand coefficient, which increases the total amount several times over.

‘The algorithm works on a simple principle. If the number of drivers and passengers is the same, the coefficient is equal to one, meaning the price does not change. But if there are more people wanting to travel than there are available cars, the increased demand coefficient is applied,’ explained Tilik Suleimanov.

For example, on a line with 100 drivers and 100 passengers, the price is normal. It starts to rain, and another 100 customers appear, but there are still only 100 cars. So the system raises the price to encourage drivers to get on the line and redistribute the flow of orders. At such moments, passengers are faced with a choice: either pay more or wait for the load on the system to decrease.

Prices are also influenced by seasonal factors. In the summer, some drivers leave for seasonal work — on construction sites, in agriculture or on trips abroad. There are fewer cars, but demand remains high. As a result, fares go up. In autumn, when many return, the market gradually stabilises.

The highest prices are recorded in rainy weather, early in the morning when some drivers have not yet gone to work, as well as on Friday evenings and public holidays.

‘Why does the price rise, say, on Sunday morning? It's because drivers are people too, they sleep, they may not go to work early in the morning. They may just go out, but a little later,’ said the company's CEO.

However, it is still possible to save money using the app's built-in options. The service allows you to reduce the price if the customer is willing to wait a little or walk to a point where there is a free car nearby. It is also possible to share a ride with another passenger. However, these options are only available when there are enough cars on the line.

Thus, the cost of a taxi is determined not only by mileage and travel time. The main factor is the balance of supply and demand. When there are many cars, the fare remains minimal. When there are more passengers than drivers, the price automatically increases. But even so, the average fare over the past year has increased by 5%, which is currently lower than the rate of inflation.