Startups Help Cut Dole Queues

EghtesadOnline: Mostafa Meisami has given up on farming life, trading his old job raising cattle for a better-paying gig ferrying commuters through the notoriously clogged streets of the Iranian capital.

News ID: ۷۷۶۸۳۰

07 June 2017

The 38-year-old father-to-be plies his trade in a brand new, locally assembled Chinese hatchback, scrolling for fares using an app on his Samsung smartphone, a report by AP says.

Among the fastest-growing companies in the digital transformation is Snapp, the ride-hailing app Meisami uses.

He estimates that he makes more than 33 million rials ($900) in a “good” month, drawing a much larger cut per fare than he would say driving for a traditional taxi-style car service. His hours are long — 12 hours a day most days a week — but he likes being able to pick when and where he works, Financial Tribune reported.

“This opened a door to people like me who had financial problems,” he said.

In addition to its basic service, Snapp offers premium rides in nicer cars as well as female-driven vehicles for women and families. It recently expanded to the nearby suburb of Karaj and the central tourist city of Isfahan, and is considering rolling out a motorcycle delivery service.

However, the market is getting increasingly overcrowded with several competitors like Tap30, Ajancy and Carpino all offering similar app-based ride hailing services.

The leading app Snapp says it undercuts taxi prices by 30 to 50% — something that several of the other competitors have followed suit.

Meanwhile, a formal request by the taxi association that authorities shut down Snapp and a smaller competitor known as Tap30 were ultimately rejected.

Startup Leaders

Snapp is owned by the Iran Internet Group, which has emerged as one of the leaders in the country’s startup scene. It is backed by telecom Irancell, which state-linked investors have stakes in, as well as South African telecom MTN and Germany’s Rocket Internet.

Figures released by Central Bank of Iran last month showed that online transactions jumped 34% year-on-year, giving a boost to the local economy.

Nader Habibi, an Iranian expert on Mideast economies at Brandeis University in Massachusetts, said the rollout of 4G mobile connections and high-speed landline Internet service over the past few years has fueled Iran’s tech boom.

“The first goal is to create jobs and new industries that can help reduce the burden of unemployment,” he said.