Why do you still need cash in Istanbul?

The answer will not be easy to handle at first. Because of?taxi scams, you as a foreigner are most likely to get into while there. Even as a local, you might find yourself in a situation where you need to pay extra in cash just to get going.

I remember coming to Istanbul in its short-lived Uber era when you had absolutely no problem with the taxis. Uber global app, BiTaksi app, easy to get the ride, linked card payment — all the usual goodies. Who knew that just a few years later in 2023, I still would need to hail taxis on the street (the ultimate tourist trap), fight with the apps to work properly, and be given the choice to walk or take public transport instead?

Countless times my friends and I have been scammed by taxi drivers in Istanbul, any taxis — from licensed yellow ones to most recently released premium black cabs. So much so that now there is a golden rule to always,?ALWAYS carry just enough cash?to cover the drives. Just in case. And these cases are plenty.

Which scams?you might ask? The refusal to accept a bank card payment, asking to send a bank transfer which never arrives immediately, stopping mid-way to double the price, threatening you at the end of the trip for cash, asking to pay overhead because of traffic, refusing to go where you want to because of traffic, adding their friends to the ride, asking you to change the cars, and of course driving in circles.

Interestingly enough, shops, restaurants, and hotels are?cashless everywhere else.

It’s?only the horror story with the taxis of Istanbul. Why?

Turns out it is an interesting topic of how progress and regress work in modern society.?Taxis of Istanbul are kept in an artificial deficit, completely controlled by the license plate owners, keeping the city authorities out of their internal affairs (or not?). Get this, the number of taxis did not really change for the last 32 years, while the city population tripled. Moreover, the taxi license plate price in Istanbul is around 300k USD and it does not move. It is fairly impossible to get new licenses, and the existing ones are kept and treated as the ultimate asset. Which it definitely is, given?the monopoly.

The taxi drivers themselves are nowhere near the wealth of the license plate owners, having to pay off daily rent and scrap their less-than-average wages. There are also city-imposed limits on the fare they can charge, which does not really correspond well with the inflation rate growth. Thus, I created my favorite part of cash tips to double the fare to get it moving.

When Uber came and disrupted their pie, they simply took it to court. Crushed it, banned it, and forced it to be?yet another aggregator for licensed taxis. Not even the Uber company was under fire, but?their Turkish management?was charged with personal responsibility.

Up to this day, there are fines and?charges against any Uber-like apps?that might take the slice away from the sweet taxi pie. The city authorities seem to be helpless against this?taxi mafia situation, resulting in the overflow of personal cars in the city, overcrowded public transport, and just in general, the scams paradise. This is a huge problem for the city, but not the one they seem to want to resolve.

Beware, folks. Let me know which taxi scams you faced while there.

‘What the Money?’?is a fintech consultancy bureau that advises on doing business across the globe and talks about digital innovations, payment landscapes, and e-commerce. WTM releases monthly digests, regular reports, and articles on hot topics in these industries.

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