Tbilisi, Georgia mandates all taxis to be white – Activists respond with free-market education on wheels!

In October 2019 the Georgian capital Tbilisi introduced tighter rules defining taxi services in the city. The formerly very open and competitive system got replaced by mandating taxis to be painted in white if they want to pick up passengers on the street. The new law also obliges taxis to be left-hand drive vehicles. In a relatively poor country like Georgia, most cars are imported used cars and come from both countries with left and right traffic. Both measures are adding costs to taxi drivers and ultimately to consumers.

Political activist and leader of the Girchi Party, Zurab Japaridze came up with an innovative solution to bypass these new regulations. He and his party set up a company called Shmaxi offering unemployed taxi drivers to drive passengers while educating them about the benefits of freedom. Passengers will not pay for the distance traveled but the length of their educational session. The drivers can either conduct the session themselves or play an audiobook in the car. Part of the educational canon are books and essays by Nobel Laureate Milton Friedman. 

Japaridze told JAM News: “The company will hire driver/educators who will convey ideas about freedom to passengers and talk to them about right and wrong. If the drivers lack the necessary knowledge, we will conduct training sessions and provide video materials that the passengers can listen to.”

This educational services on wheels allow Tbilisi’s consumers to pick between the newly regulated taxi services and the usually cheaper and more fun Shmaxi. Over 500 drivers have also signed up to drive Shmaxis around town.

Campaigner Mariam Ivanidze told me that “Some Shmaxi drivers say they earn more through our company than they could through the major taxi ones”. Shmaxi is not only a political but also a commercial success.

Shmaxi started operating in the Georgian city of Kutais as welli in order to warn local regulators not to repeat the devastating taxi regulations of Tbilisi.

This is a creative and wonderful win for consumer choice and could inspire advocates for competition in the taxi markets around the world. 

Now I am wondering if I should launch Shmaxi London as a response to the recent decision by Transport for London to take away Uber’s license… Listen to Thatcher’s biography while driving from Mayfair to London Heathrow Airport would be an entertaining way of killing the time stuck in traffic.