Following the Oil Ministry’s request, a nationwide scheme will soon be implemented to phase out 130,000 dilapidated taxis and replace them with LPG- and CNG-hybrid vehicles.
The plan aims to curb the worrying air pollution in Iranian metropolises while reducing gasoline consumption. It was approved by the Cabinet’s Economic Council late last week, the government’s news website, President.ir reported.
Reportedly, the scheme will come with financial assistance for taxi drivers and special subsidies on fuel price. No specific information has so far been released about the facilities, as the officials are yet to decide on the scheme’s details.
“Iran has some 150,000 dilapidated taxis that exacerbate the worsening air pollution. The figure comprises nearly half the total of 360,000 vehicles in the taxi fleet,” the head of Iran Taxi Union said.
Morteza Zameni added that the number of old cabs will reach 245,000 by 2021, if effective measures are not taken.
Last summer, Iran's major carmaker Iran Khodro (IKCO) and Iran Taxi Union signed a deal to upgrade the capital's aging public transportation fleet, in a push to combat air pollution in the city.
Accordingly, IKCO agreed to renovate 10,000 cabs operating in taxi fleets over a yearlong period.
IKCO's Sales Manager Alireza Oskouei said at the time that the number of new vehicles earmarked for renovating the fleet can increase, depending on demand and drivers' inclination to participate in the renovation scheme.
Reportedly, the scheme’s executors agreed with local banks to offer low interest loans to cabbies, in order to speedily implement the plan.
According to Zameni, loans worth 400 million rials ($2,500) will be offered to drivers of old taxis to motivate them to let go of their dilapidated cars.
However, IKCO’s renovation plan has not made a noticeable progress.
Inefficient Scheme
Designing plans for scrappage and replacement of old taxis has a long history in Iran.
The latest taxi renovation scheme, dubbed “Nosazi”, was announced by the government in collaboration with local banks and carmakers in 2016. The scheme was in line with efforts to reduce the number of old taxis that add to the deteriorating air pollution in the metropolis.
To become eligible, cabbies were required to register their clunkers on the website nosazi.org. After enrollment, each driver had to dispatch the old car to the scrap yard. Applicants were given 200 million rials ($1,250) in loan at an interest rate of 16%. The money was to be repaid in 48 monthly installments.
After the loan amount was reduced from the total price of the new vehicle, the driver paid the balance upfront. With car prices rising as never before, most drivers cannot afford to participate in the scheme. There have been reports that the loan amount is to be increased. How far this will help remains to be seen.
Those who engineered the 2016 taxi renovation scheme are often censured by taxi drivers. Besides complaining about annoying delays in delivery schedules, many at that time also said they could not afford the car prices, despite the loan.
There is another more fundamental issue impeding the scheme.
According to Zameni, the recent economic problems facing Iran have resulted in a sharp fall in domestic car production.
“There is a shortage of new vehicles for delivery,” he said.
According to the Industries Ministry’s data, during the last Iranian year that ended on March 19, 2020, annual domestic auto production plunged to 863,263 vehicles. The figure is 9.6% down year-on-year compared to the 955,923 units made during the year before.
Experts have been struggling to find ways to handle the issue afflicting the key auto sector, albeit to no effect. The new US sanctions and the consequently mounting economic pressure are the main reasons behind the aversion of major foreign car companies to work with their Iranian peers.
