If the government decides to reintroduce the fuel rationing system that ended in 2015 without allowing higher quotas to drivers working with ride-hailing companies, over 700,000 jobs will be endangered, says the deputy manager of Snapp, Iran’s leading online taxi company.
In a talk with the news website Peivast, Jhubin Alaghband said, “If higher quotas are not allocated to drivers with ride-hailing firms, the outcome will be disastrous…More than 700,000 drivers work with online taxi companies across the country registering 2 million plus trips every day.”
Before reintroducing the gasoline rationing system, he said, decision-makers must seriously contemplate about the subsistence of the 700,000 drivers and their families. “Any decision will impact the lives of over 2.5 million people if you take into account the family members of the drivers,” the Snapp boss said. He explicitly warned about the high joblessness and what higher fuel prices and rationing will do to the already exploding dole queues if hundreds and thousands more join the army of unemployed and job hunters.
Gasoline was rationed in 2007 to curb overconsumption. At that time car owners could buy 60 liters of subsidized fuel each month at 7,000 rials (70 cents) per liter (at the time one dollar fetched 10,000 rials). Taxis were eligible for 600 liters a month. Motorists could, however, buy as much fuel as they liked but at 40% higher prices.
In recent weeks reports on the possible increase in gasoline prices and the return of fuel rationing have dominated media headlines creating unease among cabbies and fixed-wage earners who ride taxis for work.
Observers and economic experts are of the opinion that fuel prices can triple reaching 30,000 rials per liter (22 cents) from the present 10,000 rials.
One thing is certain: rationing and higher pump prices will have a negative impact on jobs, urban transport costs and the income of taxi drivers and ride-hailing companies.
In the interview, Alaghband pointed to the economic crisis visiting the country for years and which has worsened at a rapid speed over the past six months. As the going gets tough, many businesses have closed down and sent workers home, Alaghband recalled. “Many of the former employees turned to ride-hailing firms to make ends meet. Working as cabbies with online taxi companies was the last resort to be able to provide for their families.”
Smart Solution
Alaghband added, “We are ready to collaborate with the relevant authorities to introduce a smart system to monitor mileage and fuel consumption of drivers [working with ride-hailing firms]. With the help of the system authorities will have all the information they need and allocate the required quantity of fuel to the drivers.”
During the previous round of the rationing, many taxi drivers, instead of using their fuel quotas sold the gasoline in the black market at exorbitant rates instead of driving their cabs and carrying passengers for which they were given the subsidized gasoline.
Alaghband insists the smart system can and will enable those in charge to crack down on such malpractices.
He pointed out that nothing has been decided yet. “Informed sources at the National Iranian Oil Company say special quotas will be allocated to drivers with ride-hailing firms. However, we also have reports stating otherwise.”
Issue of Oversight
On the same subject, heated debates have been reported between ride-hailing companies, municipalities and the e-Commerce Union about who should have the right to regulate the work of online taxis.
Municipal authorities claim just like the traditional taxi services, ride-hailing companies must also operate under their watch. However, as per prevailing regulations, online taxi companies only need to get permits from the e-Commerce Union without any other hassle.
Last week, Alireza Ghanadan, director of Tehran Taxi Organization told Peivast, “Online taxi firms regulated by Tehran Municipality will certainly be eligible for higher fuel quotas.” TTO itself has two ride-hailing services of its own, namely Carpino and Cabin.
Ghanadan said, “Talks are underway between TTO and two online taxi firms over possible collaboration.” He did not elaborate but noted that online taxi companies that collaborate with the taxi organization will get incentives, including fuel quotas.
In response to comments by the TTO boss, Alaghband said, “Officials with municipalities and taxi organizations have said that fuel quotas will be allocated to ride-hailing firms only if the online taxi companies agree to their oversight… If new rules are introduced that put municipalities in charge of activities of online taxi firms, we will surely collaborate with the authorities.”
Meetings have been held between the online taxi firms and the industries and interior ministries along with the Vice Presidential Office for Science and Technology to find a workable solution to the fuel dilemma and the new crisis that is waiting to happen.
The vice presidential office is responsible for overseeing and promoting online businesses.
>Expensive Enterprise
Hooman Damirchi a senior executive with the ride-hailing firm Tap30 talked with Peivast about the fuel issue. “Millions of people use services offered by ride-hailing firms every day. If drivers with online transport companies are deprived of fuel quotas, taxi fares will rise” making the hiring of cabs an expensive enterprise few will be able of affording,” he warned.
“The taxi organization is not in charge of determining fuel quotas. Therefore, we have not held talks with the organization. However, if the government decides to delegate this crucial responsibility [assigning quotas] to the taxi organization(s), they will in all certainly take undue advantage and impose their will on ride-hailing companies.”
Taxi organizations for long been pushing for authority over the activities of ride-hailing companies and determining their fares, but so far have not been successful.
Damirchi says, “We will certainly discuss the matter with the ministries of energy and interior along with officials from the Vice Presidential Office for Science and technology.”
Similar to Alaghband, Damirchi pointed out that employing the online database of ride-hailing firms and through a smart system the fuel consumption and mileage of each driver can be closely monitored. Through the system, authorities can monitor and manage the allocation of subsidized fuel in an efficient and transparent manner, he was quoted as saying.
>Critical Issue
Reports of fuel rationing have also taken center stage at dinner tables over the past several weeks with both advocates and opponents of the scheme making their views known.
Most households are already grappling with galloping inflation, price rises and price gauging unseen in recent history.
Despite the fact that some officials, including Oil Minister Bijan Namdar Zanganeh, support the rationing system to fight rampant fuel smuggling in the border regions, others have strongly warned against its high inflationary potential that would affect the livelihoods of a large majority of the people.
Fuel prices have always been a very critical issue and many are concerned that in addition to impairing the urban transportation sector, the reintroduction of the rationing system and jacking up prices at the pumps can have a gargantuan negative impact on key economic paradigms.
