The routine squabbles between angry drivers asking for change and passengers who find their billfolds empty of coins might become a thing of the past by the year end.
To remedy one of the main grievances of Tehran’s residents, cabs will be linked to the necessary software for the e-payment of taxi fares before the end of the current Iranian year in March 2019, reported IBENA.
CEO of Tehran Taxi Organization Alireza Qanadan says they are to tap into the potential of the private sector to establish an e-payment system for passengers taking taxis.
Qanadan added, “After holding extensive talks with Tehran City Council, we have decided to enlist the help of the private sector to organize the micropayments in taxis.”
The idea of cash-free payment for taxis was initially floated back in 2011 and has so far gone nowhere.
While certain locally developed e-payment services such as Phone Pay have been utilized in recent years to make payments in taxis easier, their reach remains limited.
Qanadan said they are seeking to find an economical method to replace the current system with a more efficient one for the 80,000 vehicles in the capital’s taxi fleet.
Software vs. Hardware
TTO has to choose between employment of a piece of software in the form of mobile apps or installation of hardware equipment to kick-start electronic payments in taxis.
Qanadan said given the current economic circumstances, the hardware option which included installing Point of Sales (POS) devices in the 80,000 active cabs in the city is no longer viable.
Following US President Donald Trump’s withdrawal from the 2015 Iran nuclear deal, the dollar exchange rate hit unprecedented highs, making implementation of previously-announced projects a headache for authorities who now have to deal with economic hardships they have not been prepared for.
However, one thing is for sure, the city is in dire need of improvement in the payment system of cabs. With installation of POS devices ruled out, only the software solution remains on the table for Tehran Taxi Organization.
One taxi driver says the current state of affairs is tantamount to “torture” for cab drivers who always need to have change at hand.
If someone has lived in Tehran, they would not be surprised to see passengers apologize before handing drivers high-value rial bills.
Shared taxi fares per passenger are between 10,000 rials for a short ride to 50,000 rials for long-distance drives in Tehran. While both passengers and cabbies prefer round numbers, mandatory prices introduced by the municipality almost always include some change of 1,000 or 2,000 rials which are hard to come by these days. The free market USD exchange rate was about 140,000 rials on Saturday.
Public Approach
Qanadan believes Tehran’s unique and complex infrastructure requires a comprehensive approach to e-payment. He said, “One of the main aspects of the project is fostering the required culture.”
According to Qanadan, the scheme will fail unless there is a collective will for employment of e-payment.
ICT Minister Mohammad Javad Azari-Jahromi has been striving to turn Tehran into a smart city, seeing potential in the capital’s prestigious universities and the vast number of students.
Given the popularity of online ride-hailing services such as Snapp and Tap30, and the younger generations’ acquaintance with online payment methods, the e-payment system in taxis is expected to take off well if properly implemented and promoted.
City planners could benefit from the examples set by profit-making startups whose marketing methods have proved successful.
Failed Attempts
TTO director says so far authorities have not been able to carry out a successful taxi fare electronic payment project.
Pointing to some schemes’ trial run in the eastern city of Mashhad and the northwestern city of Qazvin, Qanadan noted, “The programs executed in the two cities were rather ineffective and carried out in a much smaller scale than the one needed in Tehran.”
It has been almost two years since an e-wallet dubbed “Kipaad” was unveiled to manage micropayments under 500,000 rials ($3.7).
A joint product of Pasargad Bank, mobile operator MTN-Irancell and Fanap, an electronic payments solutions company affiliated with Bank Pasargad, the offline e-wallet is designed to use SIM cards provided by MTN-Irancell to safely and quickly conduct microtransactions for Android users. However, the scheme has failed to gain much traction with average users.
Moreover, Qanadan does not see a taxi e-payment system on a par with e-payment in city buses.
He explained, “There are merely 6,000 buses throughout the capital Tehran, while there are 80,000 taxis.”
According to the head of TTO, the City Council is looking to avoid a monopoly in the system that is going to be soon established, and has already started examining several applications that could meet the criteria required for e-payment.
The global challenge facing e-payment systems in taxis is the delay of companies in paying drivers the fees paid by passengers.
City officials are expected to tread carefully when approaching this matter due to the economic hardships that have hit the middle- and lower-class Iranians.
