Marshrutkanomics, Or, The Economics of Post-Soviet Public Transportation

One common idea I’ve heard voiced many times at start-up conferences and on entrepreneurship message boards is that of a smartphone-based personalized transit service. Rather than heading to the bus stop, or the nearest area where taxis congregate, you could simply tell your location-sensing phone that you needed a ride from, say, Prospect Park to Penn Station, and the price you were willing to pay. A message would go out to all drivers in the area who had signed up as potential drivers and were willing to drive for more than a certain per-mile rate, and sooner or later, hopefully sooner, someone would pick you up and whisk you away to your desired destination.

The idea has promise on paper, but I’m uncertain if it will work in the long run. Some of the crude technological utopianism that prevails at some of these fora neglects to remember that the staffs of private and public bus companies are themselves making calculations about the location, timing, and efficacy of given routes. They also consider, based on the best data they have, whether it might be wise to add new lines, and if so, where.

Still, the kernel of the idea in these proposals you get some times is interesting: what if there were some way to reach maximum efficiency, between some combination of public and private buses, trams, trolleys, subways, sidewalks, bike lanes, and taxis, of people attempting to move around in an urban space? The topic interests both economists, for whom these problems pose interesting questions about the extent to which firms, individual operators, and public corporations can satisfy demand, as well as city planners and administrations, who want to make sure that their cities work.

This isn’t normally a topic I think about much, but I had the opportunity yesterday to attend an interesting talk by Aleksandr Akimov, an Uzbek-born Australian academic working on these issues in the context of Tashkent, the capital of Uzbekistan. The majority of a paper he presented in Oxford recently was more for the economists in the room, examining how the efficiency of Tashkent’s public transportation changed since independence in 1991. Because of complex historical reasons, the city has fifteen public and private bus companies, a three-line metro system, trams (i.e. things on steel wheels that ride on tracks), and what are called trolleybuses, i.e. buses powered through overhead electrical lines). This bewildering marketplace makes it interesting for the economists. Add to this an exploding auto-owning populace, like Moscow but smaller, and you end up with a smoggy, but economically interesting landscape.

The Tashkent Metro may be snazzy, but marshrutkas are also nice.

But Tashkent – a big city of at least four million people today – also stands out because it, like many other post-Soviet cities has not only a huge fleet of official taxis, but also a dynamic marketplace of so-called gypsy taxis (informal taxis – you hold your hand out next to the street and a random person picks you up and drives you to your destination for a price) and so-called marshrutki (“routers”, from the Russian word marshrut or “route”). Competition among the former is fierce. Akimov tells me that if you cross a street in Tashkent you can virtually be surrounded by seven or eight informal cabs clamoring for you to name your price: a transportation market literally forms around you as you walk.

But it’s the latter, marshrutkas, that I’d like to focus on in this short essay. They’re an interesting cultural phenomenon in their own right. But I also wonder what studying them further (from the perspective of economics, not cultural studies or history – I have little interest in reading about the cultural meaning of marshrutkas) might tell us about the market transition in the former Soviet Union. I also wonder whether the problems they solve might be of use in reaching better transport solutions in the United States, a country with notoriously bad transportation options. So if this short essay is of any use to someone trying to build the next AirBNB for urban auto rides, it will have done its job.

So what precisely is a marshrutka? Most simply, it’s a minibus jammed with as many seats as possible that runs either in circles or back and forth along a given route in a city. Unlike buses, however, they don’t automatically run their routes. They typically start at a convenient and popular point in the city: say, a Metro stop at the end of the line, or a bazaar. The driver will wait around until the van is suitably filled-up, and then the route commences. Anyone waiting along the road anywhere along the route can wave to have the marshrutka pull over to the side and pick them up, and once you’re on, you typically pay a flat fee no matter where you’re going on the route; in other words, unlike buses, there is no fixed timetable and no fixed stops, other than the points that determine the route through the city.

A fleet of marshrutkas at the ready in Moscow

On top of this, a friend from Ukraine informs me that at least in Kiev, if you miss your desired drop-off point, you can pay the driver an additional fee to turn around and drive back if it’s not terribly far away, so you avert the problem of missing your stop that you face with a bus. Finally, if you’re waiting around for a marshrutka, and even after an hour, none has shown up, but then, finally one does show up, but it’s full, you’re out of luck. Most enterprising drivers will try to find a way to let you own, but if there’s no room there’s no room, and you’re off to waiting again.

I need an economist to help me understand the significance of the following, but the ownership structure of marshrutkas, at least in the Tashkent market, is complicated. Unlike the gypsy cabs, where you as the driver are ipso facto the only businessman in the equation, or with taxi companies in the West (where the firm structure is unclear to me), if one wishes to start to operate a marshrutka, they need to themselves own the vehicle. But rather than just starting up their own firm, racketeering and threats mean that one actually has to lease their own vehicle to the gang running the routes (hence getting paid), but then has to re-apply to the company as a prospective driver to run a vehicle, even their own. The driver then pays the expenses for the vehicle, and collects most of the fares for themselves.

Why marshrutkas proliferated so much in the former USSR but do not seem to exist in great numbers elsewhere is an interesting question. One factor, of course, was the de-financing and collapse of some parts of the public transport sector in the post-Soviet countries. Petersburg, when I lived there, still had a fleet of (decrepit) public buses. I was fortunate enough to live close to a Metro stop there, but my fellow classmates often had to rely on combinations of multiple marshrutkas to get to our Russian classes (also near a Metro station.) Tbilisi, a city that stretches out along both sides of a river bank, had buses, too, but so few of the routes went to areas of use for me that I rarely took the bus or marshrutka there. Yerevan, an unexpected site for interesting city planning, had a small enough urban core (the city was redesigned by Armenian Soviet architects in the 1920s) that there was little need to take the bus or the few existent marshrutkas around the place. Moscow, while enormous and with a considerable fleet of buses and marshrutka, has always been a city of subway rides for me. And Dushanbe, somewhat like Tbilisi, essentially consists of one really, really long street, Rudaki, where buses dominate. But to get around elsewhere in the city, to the few important sites that are off of Rudaki, required mastering some of the marshrutka lines.

Rudaki

Looking up Dushanbe's Rudaki Street in winter ...

Another factor which I wonder about would have to do with Tsarist and Soviet urban planning. Aleksandr Wat, in his memoirs, insisted that many Tsarist-era train stations were deliberately built a significant distance away from the main city center due to lobbying from the era’s equivalent of taxi cab unions. This is less true for cities like Petersburg or Moscow; the former’s most important train station is at the apex of Nevskii Prospect, while several of the major stations in the latter – Leningradskii, Kazanskii, and Yaroslavskii – are all located in a huge plaza, the basement connecting area of which is my personal vision of hell. (Think lots of döner kebab stands under fluorescent lights, drunks, stores selling pornography, and a pervasive musk of shredded lamb, sweat, and dried beer, all to a soundtrack of bad Russian pop music.) But Wat insisted that the station in Alma-Ata, Kazakhstan, a former garrison town, was less than convenient. That’s certainly true for Kazan, where an elegant 19th century station is still a good distance away from Baumann Street in the city center.

Komsomol Square in Moscow, Also Named "Square of the Three Train Stations"

The same problem of distance also applies to many of the great bazaars in the former USSR and socialist world. Petersburg had a huge one that I frequented often, but it required multiple changes of marshrutkas. Dushanbe had a delightful main market, the Green Bazaar, in the middle of the city, but most of the real action seemed to be going on at a larger bazaar well out of reach of the city’s bus lines. The same is true of markets in Budapest and Warsaw, two places where I have gone searching for one of my obsessions (1950s and 1960s travel maps, and authentic Eastern European food). Akimov tells me that two of the most important commercial centers in Tashkent are out of reach of the buses and Metro system.

A typical scene from Dushanbe's Shohmansur Market (also known as the Green Bazar)

One could go on. What I wonder is why city authorities never connected the end lines of their public transport system to the major commercial hubs – when at the same time there’s a brisk trade in marshrutkas to and fro these very end points. True, there were exceptions. Tbilisi’s Didube market essentially grew out of one of the outer stops of the Tbilisi Metro, and there are buses all around the country from there, too. I suspect that many of these markets emerged out of the post-Communist situation, but it makes me wonder why city authorities, in so many cases have been unable to connect their city centers or their own metro stations with other useful points. Getting data here would be a challenge for the economist willing to find the quantitative data telling the story here, but I’d be eager to listen.

At the same time, these reflections make me wonder whether one could sketch out an economic model of when the marshrutka system of routing becomes more efficient, or profitable than scheduled (but often empty) public transport options. As I learned at the Akimov talk, folks in the business of transit studies will make the distinction between efficacy (does the system work?, or the distance or space covered by the system), vs. efficiency (how little does the system waste?, or to what extent is the system satisfying consumer demand for transport around the space or not). Marshrutkas are masters of the latter, but poor at the former; subway systems do the precise opposite. It makes me wonder why certain pricing schemes (flatrate) persist for marshrutkas, whereas efficacy-oriented systems (buses, the subway system in Berlin but not New York) have zone-based pricing schemes, and so on. How smartphone-based systems could be integrated into it all would be interesting, too. The level of Internet penetration (as opposed to cell phones) in the former Soviet Union remains much lower than in countries like Egypt or India, so I doubt that we’ll be seeing Internet-enabled marshrutkas anytime soon, but if there is an enterprising economist – or entrepreneur out there – willing to do the research and find the margins and best business models for the various situations, you’d have at least one reader.

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One thought on “Marshrutkanomics, Or, The Economics of Post-Soviet Public Transportation

  1. Akmal

    Hi,
    As start off, I would like to thank the author for interesting and very inspiring narrative on city public transportation in some former soviet countries. The author’s vigor to invite wide audience to discuss the Marshurutka topic is a novel approach to review some particular aspects of the transition path of the former soviet republics that are usually bypassed in the mainstream literature. In this my short post, I would just like to give an example of Marshurutka use in Fergahan and respond on the need for more coherent research on the topic.
    At this moment I want to add one point to what there have been said about the use of Marshurutka in Uzbekistan. While in this blog, the accent is made on Marshurutka as a phenomenon in the capital city, it is noticeable that Marshurutka’s use is even more common and widespread in rural areas and inner regions of Uzbekistan. Marshurutka in many instances is used as transportation means that carry people from small cities and villages forth and back to regional centers and main sub-regional transportation hubs. For example, Kokand city in Ferghana region is a sub-regional hub and it receives more than 1mln. people during weekends coming from rural regions that surround the city. Kokand is an attractive place because of its bazaars and very suitable geographical location. To transport of vast number of people, Marshurutkas are almost unreplaceable in many terms. First of all, there are thousand Marshurutkas rolling on the roads connecting remote villages with the town. Secondly, they are relatively fast and convenient for journeys that are stretching 20-30 km. Thirdly, Marshurutkas provide only seating seats and can load 7-15 persons depending. This is a very big advantage of Marshurutkas over mini and big bases. There are many verities of Marshurutkas. But most popular is old Merceedes minivans.
    I agree with the author that there are a few studies that are devoted to the research of economic side of the use of Marshurutkas. I think such research will bring a lot of interesting findings on how ordinary people are coping with transportation constrains to peruse their economic benefit in the market economy.

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