Ride-Hailing Service Just Got Contentious

In a new wave of revolts against the advancement of Internet-based services in Iran, the Head of Tehran’s Taxi Union claimed on December 6 that there is no proper supervision over ride-hailing applications.

 “Many passengers have filed complaints with us against companies offering such services; the union, therefore, aims to bring them under its supervision and has sent a request with Iran’s Chamber of Guilds,” ITIRAN quoted Qasem Qorbanikhah as saying.

Avoiding naming the companies (a norm in Iran) the official noted that “activities of such firms do not fall under the supervision of any union. They operate only because they have managed to register as a company and this is precisely why the activities of ride-hailing apps have mushroomed recently.”  

He warned passengers who use such services that “no organization can be held responsible in case of a problem or if a passenger were to incur possible financial or physical harm.”

 Fair Fares

Touching on a more critical issue, the official said that the companies are legally required to comply with the regulations of a union mainly because “they must follow a unified pricing policy.”

Affordable fares and special price offers are in fact one of the most significant competitive advantages of such cab services in Tehran. Snapp and TAP30—the two most popular ride-hailing applications in Tehran—are known for charging nearly half the amount regular taxi drivers do, much to the chagrin of the certified and recognized taxi firms.

Not to mention that the fare is announced even before the car shows up to avoid haggling; the amount can be paid in cash or via the Internet. The older generation of taxis has lost great market share to Internet-based ride-hailing services specifically because of the much cheaper rates offered by the latter.

Another appealing feature of the new ride-hailing services which has played a part in the increasing popularity of the applications are better cars; Snapp passengers have reported having ridden in Hyundai i30 and Kia Cerato, to name a few.

Qorbanikhah also referred to this issue claiming that the companies merely act as an intermediary. “The firms rent high-end cars from their original owners. This is compensated as the firms charge their hired drivers more money than the amount which has been paid to car owners.”

In response to the comments by the union official, several Iranian users took to the Internet to express their dissatisfaction. One Internet user noted that the statements are “absolutely ridiculous.”

The user who went by the screen name “Arman” said that “blind rejection of services which have created so many jobs and made the life of Tehran residents much easier can be interpreted in only one way: you believe that the people are stupid.”

The user added that it is also a testament to how backward officials are while adding that even if the criticisms are valid, the officials should “try to remove the faults and find workable solutions not to undermine” whatever has been built so far.   

In the new ride-hailing system it takes no more than ten minutes from when a request is placed until a car arrives to pick you up. Furthermore, the applications have made the ride-hailing process easier and more accessible through the use of GPS tracking.

Much like a regular agency taxi, the tech firms commission drivers upon completing a background check and showing a valid driver’s license and insurance. They currently only operate in Tehran.

The Financial Tribune contacted Snapp and TAP30 for a comment.  Snapp said that a response was being prepared but declined to answer our questions on phone. The team at TAP30 was unavailable and did not respond.