Business news from Ukraine

ANTIMONOPOLY COMMITTEE OF UKRAINE INVESTIGATING PRICING IN TRANSPORT MARKET ON FIRST DAYS OF LOCKDOWN

The Antimonopoly Committee of Ukraine (AMCU) is investigating the formation of prices in the transportation market due to a sharp price rise for the services of the main players in the taxi market on the first day of lockdown, Head of the Northern Territorial Branch of the AMCU Oleksiy Khmelnytsky said on his Facebook page on Wednesday.
He said that on the first day of lockdown, the prices for taxi services of the three largest organizers of transportation via mobile applications simultaneously increased by 3-4 times, which is unacceptable.
“Already in the evening of April 6, taxi prices fell noticeably. It should be noted that the demand did not decrease [there were no less trips, the demand was constant] and lockdown was not canceled. This is the reaction of these companies to the indignation of Kyiv residents, the media and the AMCU’s reaction. I am convinced that companies can adjust prices on their own, not only automatically, given the critical situation with COVID-19 in Kyiv. Could there be any signs of violation of competition laws [on coordination of actions]? In my opinion, yes,” Khmelnytsky said.
He also said that the AMCU should definitely respond to a large number of appeals from Kyiv residents.
“We cannot ignore citizens’ appeals; that is why we launched our probe. This is the law […] In fact; the situation on the transport market [whatever you call it, for people it is taxi services] has not been studied by anyone. That is why we started the study. We will draw conclusions based on its findings,” he said.
At the same time, Khmelnytsky noted that the AMCU perfectly understands all the specifics of the work of programs and applications, which are rather difficult to control.
According to him, if, based on the findings of the study, the AMCU does not receive evidence of anticompetitive concerted actions of the largest market players, the committee will definitely inform about it.
“If we get evidence of a violation of competition legislation, we will open a case, make a decision and fine the violators. If it turns out that the legislation and rules do not correspond to modern technologies, we will turn to legislators with a proposal,” the head of the AMCU Northern Territorial Branch said.
As reported, on April 5, taking into account the imposition of strict quarantine, prices for taxi services, in particular in Kyiv, increased several times.
Bolt taxi ordering service (formerly Taxify) has decided to forcefully adjust the coefficient that affects the increase in cost during the period of increased demand.
Taxi ordering services Uklon and Uber told Interfax-Ukraine that their pricing systems depend on many factors, automatically taking into account the situation on the roads, weather conditions, demand and others.

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Ukrtransbezpeka accrues more than UAH 137 mln of overload fees in 2020

Inspectors of the State Service of Ukraine for Transport Safety (Ukrtransbezpeka), together with the National Police, checked almost 700,000 vehicles in 2020, having drawn up more than 14,000 acts on violation of overall and weight parameters, and accrued more than UAH 137 million of overload fees.

The press service of the Ministry of Infrastructure reported on Tuesday with reference to Minister Vladyslav Krykliy, among the regions at the end of the year, most of the fees was charged in Odesa, Kherson and Kyiv regions.

“In 2020, we declared a battle to overloaded trucks, introduced enhanced weight control and continue work on reforming and digitizing Ukrtransbezpeka to eliminate the human factor. More than 40 WiM systems have been installed. And this year at least 100 WiM will work,” the press service said, citing Krykliy as saying.

According to him, full automation and digitalization of all processes to eliminate the human factor remains the main goal of the ministry in reforming Ukrtransbezpeka. But for the full-fledged launch of the automatic weight control system in Ukraine, the soonest adoption of bills No. 3742 and No. 3743 by MPs is necessary.

“Now the Verkhovna Rada is considering at the second reading bill No. 3743, which provides for the refusal of fare and transfer of responsibility for violation of the overall and weight standards in the plane of the Code of Ukraine on Administrative Offenses. This will simplify the collection procedure and increase the percentage of paid fines,” Head of Ukrtransbezpeka Yehor Prokopchuk said.

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SKYUP TRANSPORTS ALMOST 131,000 PASSENGERS IN OCT

SkyUp (Kyiv) in October 2020 transported 130,900 passengers, of which 114,500 by charter flights and almost 16,400 by regular flights.
The press service of the airline reported on Tuesday, in October there were 825 flights under domestic and international flight programs (672 charter flights, and 133 regular flights). Some 79 flights were performed in Ukraine.
The airline also said that in the past month, it completed 91% of its flights on time.
In addition, in October SkyUp transported 31 tonnes of cargo, which is almost 2.5 times more than in September.
SkyUp Airlines LLC was registered in Kyiv in June 2016. The founder is Tetiana and Yuriy Alba’s ACS-Ukraine LLC, which also owns the JoinUp! tour operator.

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UKRAINE, SLOVAKIA TO COOPERATE IN DEVELOPMENT OF TRANSPORT

Ukrainian Infrastructure Minister Vladyslav Krykliy and Minister of Transport and Construction of the Slovak Republic Andrej Doležal signed a memorandum of cooperation within the Silk Road Economic Belt.
The press service of the Infrastructure Ministry said on Thursday that the document will contribute to creating conditions for the further development of multimodal transport in transfer between Asia and the EU through Ukraine and Slovakia, as well as for increasing the number of container block trains that will be used for combined freight transport; putting into practice the implementation of the project on the creation of multimodal logistics centers that will handle cargo on the Silk Road route, which will make it possible to form an appropriate bilateral working group and create a basis for negotiations with the Chinese side; developing a common approach to organizing the movement of container trains running between Asia and the EU through Ukraine and Slovakia.
“Both Ukraine and Slovakia are extremely interested in developing their transit potential and improving the processes of organizing the delivery of goods in containers from the EU countries to China and vice versa. In early September, we held consultations with the Slovak side to intensify cooperation in the development of the Silk Road through the territory of Ukraine and Slovakia. Today we are fixing them with the relevant memorandum,” the press service said, citing Vladyslav Krykliy.
The ministry said that the memorandum has been drawn up for an indefinite period and will enter into force on Thursday, September 24.
In addition, according to the ministry, during a meeting with the Slovak side, the Minister of Infrastructure confirmed the readiness to intensify the work of the Ukrainian and Slovak sides on the development of logistics terminals in Chop, Mukacheve and Košice and proposed a joint search for financial resources for the implementation of the Creation of Multimodal Logistics Center Between Ukraine and Slovakia Based on the Existing Terminal in Chop project.

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TRANSPORT ENTERPRISES OF UKRAINE REDUCE TRANSPORTATION OF GOODS

Transport enterprises of Ukraine (excluding the territory of the Autonomous Republic of Crimea and Sevastopol, as well as part of the JFO zone) in January-August 2020 reduced transportation of goods by 13.4% compared to the same period in 2019, to 382.2 million tonnes, the State Statistics Service has reported.
According to the report, the freight turnover of carriers for the specified period decreased by 17.1%, to 185.7 billion tonne-kilometers.
According to statistics, for the eight months of this year, 196.7 million tonnes of cargo were transported by rail in domestic traffic and for export, which is 5.3% less than in January-August 2019. Some 119.4 million tonnes (23.5% less) were transported by road, 3.3 million tonnes (12.4% less) by water, 62.7 million tonnes (15% less) by pipeline, and 100,000 tonnes by air (10.7% less).

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UKRAINIAN ASSOCIATION OF TRANSPORT, SERVICE AND REPAIR TO BE CREATED TO TAKE PART IN MAKING LEGISLATIVE CHANGES

Participants in the market where used cars from the United States are sold intend to create the Ukrainian Association of Transport, Service and Repair with the aim of participating in making legislative changes in the car market in order to avoid initiatives that create obstacles to buying inexpensive cars and raise their prices.

“We plan to make an influential body that will participate in drafting bills, amendments and additions related to the car industry, in discussions of planned legislative changes that may restrict the sale of cars with the relevant ministries,” Head of the association, co-founder of Columb Trade Pavlo Kazaryan said at a press conference at Interfax-Ukraine on Tuesday.

According to lawyer Roman Voloshyn, the main goal of the association is to simplify business activities and opportunities for buyers as much as possible in order to reduce the cost of registration and purchase of such cars.

He said that the need to create an association arose after the car market participants managed to achieve the abolition of the planned ban on imports of cars to Ukraine after a road accident, which a draft government resolution developed by the Ministry of Internal Affairs and published on its website contained.

After a public outcry, the government decided to abandon this idea of the Ministry of Internal Affairs, and the recently published updated text of the resolution on the registration of the vehicle no longer contains “scandalous provisions” prohibiting registrations of cars marked with the recycling label, as well as the need to translate accompanying documents into the state language with an apostille.

Meanwhile, as noted by the co-founder of the association, Volodymyr Kovel, negative changes have occurred since the publication of the resolution (February 2020), in particular, according to the surveys they conducted, about 72% of potential customers refused to buy a car from the United States in order to avoid risk and they overpaid 30% of the cost for the purchase of a car from Georgia and Europe or bought a car in a condition that was not desired.

In addition, he said that taxi services operating hybrids and electric cars received less money from investors for the purchase of cars and the development of the business, large contracts for the supply of spare parts from China, the United States and Germany were canceled due to the risk of closing the business, some companies were closed because customers stopped to sign transactions due to confusion, and dozens of service stations could go bankrupt, as they took large loans for business development.

“When we united to solve the problem, created a petition on the president’s website, which received more than 18,000 votes, many companies joined us, and we were heard by the state, we realized that it was necessary to create an association that would participate in the development of legislative changes, both taking into account the wishes of business and the authorities, that is, to find a compromise,” Kazaryan said.

According to him, the association intends to unite companies selling used cars from the United States, forwarding and brokerage companies, suppliers of spare parts, service stations and local carriers, as well as transport companies and taxi services.

“Any intention to amend the legislation affects the business, the pricing policy, and its entrepreneurs are afraid of such rumors in the market even more than inspections. The association is also needed in order to bring as many market participants to work legally and explain advantages of such work. I want about 85% of companies to work openly in a couple of years,” Voloshyn said.

According to him, after the publication of the draft resolution, the demand for cars from the United States in Ukraine fell due to the fact that people did not understand whether it was worth buying now, how to redo the documents, whether it would be registered.

“After the changes were removed, the percentage of purchases started to grow by 5-10% every day, and we have already reached the average monthly purchases that were before,” he said.

Asked about the impact of the situation with the spread of coronavirus in this country and lockdown restrictions on the business of selling cars (with a recycling label) from the United States, Kovel said that, of course, after the phases of falling prices for cars meant for recycling and the devastation of the market, prices increased, logistics due to temporary quarantine in ports has become more complicated.

“However, now the situation in the United States is leveling off, and prices are returning to the level before the COVID-19 pandemic. That is, there was no big decline in this area, and the expected changes in legislation brought much more losses,” Kovel said.

He recalled that taking into account monthly deliveries of about 10,000 cars from the United States, $327.8 million annually comes to the budget, and the total volume of the market of cars from the United States, taking into account all related services, is $836.64 million.

He named the Volkswagen Jetta and Passat cars assembled in Mexico, as well as the Ford Focus and Fusion cars the most popular.

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