Hail Storm

The Taxi Industry in Istanbul

With Uber and the financial woes of its many drivers dominating headlines of late, it is easy to overlook the trials and tribulations of the traditional cabbie.

Turkish Taxis converge on Taksim Square, Istanbul

For Turks, the yellow Istanbul taxi is as iconic as its New York counterpart, and an often-vital escape from a public transportation system woefully underequipped for the 15 million people that call the metropolis home—according to the TomTom Traffic Index, Istanbul is the sixth most-congested city in the world, with 49% of the city suffering from gridlock.

Serving those 15 million people are 18,000 officially registered taxis, with another 50,000 unregistered, by best estimates. Like in many locations around the world, the Istanbul authorities are staunch backers of the traditional taxi industry, standing firmly against “pirate” taxis and squashing attempts by Uber to gain a foothold in the city in mid 2016, fining 912 of its vehicles for operating without the right paperwork.

But despite the authorities’ best intentions, life as a taxi driver remains a struggle in Istanbul. US footage that emerged last week of Uber CEO Travis Kalanick arguing with driver Fawzi Kamel, who had expressed frustration over his financial struggles, along with general unrest among Uber drivers the world over, has overshadowed the plight of conventional taxi drivers, especially in lower-income markets. In Turkey, overheads are high, with petrol costs—the price of Gasoline at the pump in Turkey (USD1.41 per liter) is comparable to the UK price (1.47)—only one of the financial barriers to an aspiring driver.

Even getting started is a challenge, with the age-old maxim of “It’s who you know,” often the only way to secure a gig due to operators being unwilling to trust unknowns in a high-risk business.

A driver first has to decide whether to “rent” a vehicle from a taxi business owner, or to work directly with the owner of the license plate, to whom the vehicle owners are generally indebted. Choosing to work for the middleman means you’re expected to pay petrol costs, insurance, and rank fees, at a total of up to TL250, or USD67, a day before you begin to earn anything for yourself. Failing to even meet that target means you’ll be out of pocket, and not long for the profession. Estimates suggest vehicle owners pay license plate owners up to TL5,500 a month per vehicle, hence the pressure on their drivers. And here is where the real money is; a taxi license plate costs upward of TL1.5 million, a number that has trebled in the last decade. In 2013 alone, the price increased from TL800,000 to TL1.2 million, with returns sometimes better than gold and equities. Investing in taxi license plates has quickly become as popular as Turks’ usual go-to investment; real estate, with the quick salability of plates making it all the more attractive an investment option.

But if all that makes it seem like a strange career move, after a quick look at Turkey’s unemployment figures, which breached 12% in 2016 (or 3.715 million people), it all begins to make sense. So how do the passengers feel about the daily struggle of drivers across the city? Taxi drivers in Istanbul are notorious for trickery aimed at racking up larger fares, while the Chamber of Istanbul Taxi Drivers has lobbied strongly in recent years against violence against drivers. Still, it knows its fortunes depend on passengers, and operates a 24/7 complaint line, with drivers who collect too many complaints being fined and eventually banned from the profession.

But with making a profit daily a tall order in many cases, especially as taxis are at their cheapest in Istanbul when compared to other parts of the country (currently TL2.10 per km in Istanbul compared to, for example, TL2.75 in Konya and TL2.60 in Antalya), drivers often refuse to accept low-distance fares, an offense under taxi regulations. To tackle this issue, the Chamber of Istanbul Taxi Drivers recently announced a minimum fare of TL8.75. Drivers will face bars should they still refuse passengers.

Moving forward, and Uber-like apps still pose a threat to profits long term. One such app, locally developed Olev, is hoping to tap into a market worth in excess of USD1.5 billion annually by gaining the trust of passengers with drivers they recognize. Simultaneously, new measures have been introduced across Turkey, including a new taxi license that individuals will need to obtain and renew, through fresh training, every two years in order to ensure that not everybody can get behind the wheel.

So next time you think using Uber may be the most significant moral decision you make all day, spare a thought for the overworked (shifts typically run from 06.00-15.00 and 15.00-3.00) Istanbul taxi chauffeur, who is, more often than not, stuck between a rock and a hard place.

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