Will Ride-Hailing Services Become Illegal in Iran?

The use of ride-hailing services in Tehran has seen a significant increase; their availability, service quality, and reasonable prices have posed challenges for traditional taxi businesses. Although companies providing these services are legally registered, the Tehran Union of Tourism and Car Rental Institutions considers these services illegal and demands that they operate under the union's umbrella and adhere to its pricing. Qasem Ghorbani-Khah, the head of the Tehran Union of Tourism and Car Rental Institutions, stated, "The Tehran Car Rental Union is trying to bring these service providers under its umbrella due to numerous complaints received against these companies." He mentioned that the activities of some companies sending cars to people through internet applications are registered but not supervised by any union, and the legal gap between company registration and union oversight has led to a mushrooming of these activities. Given the recent issues faced by the public in accessing these services and the repeated complaints received by officials, the union has requested the National Chamber of Guilds to bring these car service providers under its supervision. The head of the Tehran Union of Tourism and Car Rental Institutions emphasized that currently, all software providing car services to applicants operate without licenses and are not supervised by any authority, warning that in case of issues, no entity will be accountable for individuals' financial and bodily damages. Legally, these companies are required to comply with union regulations, and every profession must operate under a union to price their services according to the union's approved rates. Recently, the activities of car rental and ride-sharing companies in Iran have expanded significantly, yielding substantial profits for business owners in this sector. This segment of economic activities, which falls under startups, is profitable, high-risk, and very diverse and widespread. In cities like Tehran, which suffer from heavy traffic and lack a public transportation system commensurate with the city's population, the general public prefers to travel by private cars. However, issues such as high fare rates or frequent taxi changes exist. If a car is available that moves directly along the passenger's route but is cheaper than "agency" or "chartered" rides, many would likely prefer it. Two years ago, Snapp was born as a startup in the country's transportation industry. Now, with two years of experience, several thousand drivers and hundreds of thousands of passengers use this company's application. Snapp's competitor in Iran is Tap30, which quickly grew to become a serious rival to Snapp.