There has been a lot of hype in recent months about Google’s self-driving car. Add to that the rise of Uber and one could be forgiven for thinking the end of car ownership is near.
The upcoming radical shift will change our consumption habits for sure. It will also save people a significant amount of money and help the environment by halving the number of dormant vehicles on the road.
If current trends in the West are to be extrapolated, then the future of cars is not with traditional car manufacturers like Iran Khodro and Saipa that thrive in a monopolized market. The duopoly will soon learn a hard lesson that selling substandard cars at high prices is no longer sustainable.
European and American companies are already aware of this shift. That’s why they are pushing for emerging markets rather than their traditional heartlands, as sales continue to sag.
Emerging markets such as Iran offer huge potential for foreign auto manufacturers. The country will, for some years to come, remain a major target market.
However, as vehicle ownership is costly, people are seeking other options. There are multiple forms of transport, but only one kind so far can match the ease of car ownership.
This type of personal transport has existed long before the Internet came along and continues to serve thousands of people daily. Yes, it is the humble taxi agency, or the French “agence” (pronounced as “ajance” in Persian).
This conventional mode of urban transportation in Iran is often used by people without cars. It is relatively inexpensive and trouble free.
The process of ordering such a taxi is straightforward. The person wishing to go somewhere calls the nearest taxi agency and mentions the destination. The car rolls up outside the person’s house, on average 15 minutes later, and the client jumps in and goes to their destination.
The rate for a cross-city journey is about 200,000 rials (approx. $6) with shorter journeys costing less.
The benefits of this service include no dealing with servicing, tolls, parts, parking charges or fines.
In comparison, if one buys a new Peugeot 206 worth 370 million rials ($11,000), and uses an average of 45 liters of fuel a week at 10,000 rials, then the fuel will cost 6.41 million rials a month ($190).
Add other costs like insurance, breakdown cover and service and parts, then that figure will top 1.3 million rials ($39).
The total price for the new car and all the extras now totals 38.5 million rials a month ($1,156). The price difference between having your own private chauffeur at a moment’s notice now equates to $918.
This cost prediction does not include other hidden charges like minor/major accidents, which often occur in cities like Tehran.
There are also other benefits to not owning a car in a city like Tehran. Road rage incidents occur often, with altercations causing high levels of stress.
One must also remember that such taxis are the most expensive option. Other services like underground metropolitan trains (subways), BRT systems and shared taxi schemes are cheaper than a private taxi.
When one does the basic math and adds in the variable for minor accidents, then it pays to call the taxi agency in a city like Tehran.
What the US and Europe are beginning to discover in terms of ownerless travel, Iranians have been using for decades, minus the smartphones.
