Cyberspace Chief in Tehran: Time to Fix Legal Flaws in E-Commerce

EghtesadOnline: Secretary of Iran High Council of Cyberspace says the country lacks a strong and effective legal infrastructure for expansion of Internet-based businesses.

News ID: ۷۷۹۹۰۲

23 October 2017

Abolhassan Firouzabadi says, “In order not to hamper or hinder businesses the government has seemingly ignored the legal void” that must be fixed in the interest of the people and the policy of promoting online commerce.

He believes that it is high time for the authorities to address the problem, local news website CITNA reported.

In recent years Internet-based services and e-commerce have grown exponentially in Iran and online businesses, from ride-hailing services to online realtors, now have a significant share of the ecommerce market. However, the sector is suffering from a legal fatigue and flaws that in addition to hampering the progress of businesses puts users at unwanted risks, according to Financial Tribune.

Catering to the needs of the swelling population in major Iranian cities, Internet-based businesses — a pet project of President Hassan Rouhani’s administration — have created thousands of jobs. The government has long admitted that unemployment is its ‘Achilles heels’ and that it alone is unable to create millions of jobs needed for the large numbers coming out of universities every year.

However, the businesses have had their downsides as well. Recently an abuse case against a Snapp driver — the country’s largest ride-hailing service — has led to public outrage. The company’s business-customer agreement published on its official website includes a strange disclaimer clause. It reads like this: The business is not responsible for its drivers’ conduct.

In a desperate move aimed at crisis control and mend the business’s marred reputation the company’s managing director Shahram Shahkar published an official statement. “Passenger security is on top of Snapp’s agenda. In order to prevent reoccurrence of such mishaps we are revising our recruitment system.” The disclaimer clause has now been removed from its website.

According to the statement, Snapp will not recruit new drivers until further notice and all current drivers will go through “mental evaluation tests”.

Negative Impact

Snapp claims so far it has recorded more than 100 million successful rides in Tehran and other major cities. According to drivers working for Snapp, after the news of the sexual abuse case was reported calls for the taxi service has plummeted.

Furthermore, earlier last week, Snapp drivers gathered in front of the business’s offices in Tehran, calling on the company to increase the fares. Reportedly, the drivers are also upset with Snapp’s delayed payments and many have threatened to leave Snapp and join its rivals.

Telcom Minister Mohammad Javad Azari Jahromi recently said, “The online businesses have made life easier for the people. However, such incidents (abuse and harassment by drivers) harms customers’ trust.” He is of the opinion that “Customer trust is the biggest asset of online businesses and such companies must revise their recruitment procedures to avert such problems.”

Jahromi’s comments is a reminder to those who follow e-commerce developments.  On Sept. 22 following the London transport authority’s decision not to renew Uber’s license, the company’s CEO Dara Khosrowshahi sent a sobering, self-reflective email to employees.

In what was an uncharacteristic move for a company plagued by rampant sexism and regulatory abuse Khosrowshahi told Uber employees that “there is a high cost to a bad reputation.” Khosrowshahi wrote, “It really matters what people think of us.”

It is clear that Uber is taking the controversies as teachable moments, and that a ban in a city as large and instrumental to its business as London could push it to improve its systemic issues. Hopefully, Snapp and its local rivals will follow Uber’s example and learn from their previous misconduct.