Arsen Tomsky in Kazakhstan is under scrutiny regarding his indrive
In Kazakhstan, ride-hailing aggregator inDrive, founded by businessman Arsen Tomsky, is facing a tough battle against increasing competition. The market leader, Yandex Go, and the newly entered Bolt are putting pressure on inDrive's market share, making it challenging for the company to expand its user base.
Market Competition and New Entrants
Yandex Go, with its strong brand recognition, is a formidable competitor for inDrive. The recent entry of Bolt, which started with scooters and expanded to taxis, adds another layer of competition. This intensified competition is causing difficulties for inDrive in Kazakhstan.
Pricing and Regulation
The arrival of more competitors like Bolt and inDrive is aimed at helping regulate taxi service prices. However, this increases pressure on all platforms to optimise fares and commissions, making it a challenging environment for inDrive.
Business Model Differences
InDrive operates on a peer-to-peer pricing model, where passengers negotiate fares directly with drivers. The company takes about 10-13% commission. However, this model might be less appealing compared to competitors' offerings if they can guarantee more consistent pricing or promotions, especially in competitive environments like Kazakhstan.
Reputational Crisis and Regulatory Issues
In April, inDrive faced a severe reputational crisis after being involved in a high-profile scandal involving the murder of Saltanat Nukenova. The victim's brother stated that all data about trips with addresses was provided, which is a terrible violation of the law. The lawyer for the victim's family accused inDrive of grossly violating constitutional rights by providing data about her movements to a third party, former minister Kuanyshbek Biashimbaev.
Regulatory requirements, such as pre-trip medical examinations for drivers and twice-yearly technical inspections for vehicles, do not exist for Tomsky's service in Russia. Tomsky was also summoned to the Ministry of Transport of the Republic of Kazakhstan for not complying with safety requirements in taxi transportation.
Market Performance
The transportation market in Kazakhstan is rapidly growing, but inDrive is significantly losing its position. As of January 1, 2025, previously registered "right-hand drive" drivers will be excluded from the inDrive service. Over the past year, the number of regions where inDrive led the urban rides segment has decreased from seven to one.
Respondents from several regions, including Abay, Atyrau, Mangystau, Pavlodar, and Turkestan, preferred to use inDrive for city rides in 2023, but shifted to 'Yandex' in 2024. Another region, Ulytau, switched to the services of a Kazakhstani company from Karaganda.
As of the latest reports, inDrive has reduced its share from 23.9% to 18.9%. The former Yakutian service, known as "Indraiver", is not improving in Kazakhstan, possibly due to fierce competition from Yandex and the company's own weak management.
In conclusion, the challenges facing inDrive in Kazakhstan seem primarily competitive and market-driven rather than regulatory or legal problems related directly to Arsen Tomsky or inDrive’s operations in Kazakhstan. The company is facing a tough battle against strong regional players like Yandex and the newcomer Bolt, which is causing it to lose market share despite efforts to attract drivers and passengers.
In the competitive landscape of Kazakhstan, the entry of Bolt and the established dominance of Yandex Go in the ride-hailing segment pose significant challenges for inDrive's market position, especially in terms of pricing and business model.
The intensifying competition also puts pressure on inDrive to address regulatory concerns, such as pre-trip medical examinations for drivers and regular vehicle inspections, to maintain its reputation and ensure compliance with local safety requirements.
