Mohammad Khalaj in an interview with reporters: By removing “I’m in a hurry” and Pricing leverage, we will see adverse consequences, which will show the correct functions of this option
According to Iran digital economy annotation, the removal of the “I’m in a hurry” option from Snapp and Tapsi by the order of the government penal organization happened while both of these online transportation service providers said that in the meetings they had with the penal organization, legal evidence, documentation and explanations about the nature, function and benefits of the existence of this They have explained the option in their platform.
The “I’m in a hurry” option has been removed right in the last days of the year when businesses are at their peak, city commuting and traffic rush, and now this removal may lead to more passengers waiting for the driver to accept their travel request, and as a result, the cost of the trips will also increase.
Of course, this can have other negative consequences. Mohammad Khalaj, the CEO of Snapp, mentions both these consequences and the efforts he made to prevent the removal of this option. Perhaps most important among Khalaj’s statements is that decisions such as removing the “I’m in a hurry” option or applying command pricing to Internet taxis are generally made regardless of the status of the driver’s users. Snapp’s CEO also believes that decisions like removing “I’m in a hurry” or trying to order pricing will destroy the order of the online market.
In the meetings we had with the inspection of the Ministry of Security and the Punishment Organization, we were asked to remove the “I’m in a hurry” option, and despite all the explanations, documents and legal evidence we provided, we had no choice but to remove this option and removed it. It is said that the “I’m in a hurry” option has been abused and drivers won’t accept the trip until the passenger user selects this option, but statistics show that 90% of our trips are made without using this option.
The “I’m in a hurry” option was originally developed based on the request of our commuter users. Before this option was added to the Snapp platform, many passenger users recorded false stops in their requests so that the price would increase and their request would be accepted. For this reason, they requested that an option be considered that would increase the price and increase the probability of the request being accepted. There was such a request and need from the side of the passenger users, we had also added it.
The ‘I’m in a hurry’ option has many benefits and increases the travel acceptance rate on the Snapp platform. This option resulted in nearly 100% acceptance rates for applications that had a zero acceptance rate or were taking longer to be accepted.
This will increase the acceptance rate on our platform. When the acceptance rate goes up, a positive signal is sent to Snapp’s pricing algorithm, which gives an appropriate response to the requests with the standard calculation rate. In this situation, the requests of a wide range of passenger users who do not use the “I’m in a hurry” option have been answered and their travel requests are accepted.
By removing the “I’m in a hurry” option, unfortunately, we will see other undesirable consequences, and these consequences will show the correct functions of this option. When you have to answer a large number of requests in a longer period of time, the response rate is affected and the number of trips taken decreases. This is included as an item in our pricing discussion. However, we definitely control the price volatility with the monitoring we do.
I think removing this option could have been done with reassurance or done at another time; Because the last days of the year are the rush hour for all businesses, city traffic is high and there are many requests. However, all these things do not make us witness the price fluctuation and we control the prices.
Snapp has documentation and legal evidence to prove that the “I’m in a hurry” option was not an example of overselling. Snapp operates according to the upstream licenses and instructions, and there has been no violation regarding this option. We will certainly continue to follow up on this issue from the Punishment Organization and other organizations and institutions that are related to this issue and provide our explanations and evidence so that there is transparency about this issue and if there is any concern on the part of these institutions, fix it.
SNAPP received its license from the National Union of Virtual Businesses, and besides that, there is a directive for monitoring the activities of Internet taxis, which was approved and announced by the Ministry of Interior and Ministry of Security in 2018, and we are subject to it. Fixed and dynamic pricing for internet taxis has been explicitly confirmed in this instruction.
In Snapp pricing, various factors such as traffic, supply and demand, weather conditions, travel time, etc. are influential, and according to these factors, pricing can be floated as needed. A note under Article 6 of this directive mentions that if the prices set on our platforms are higher than the approved rate of telephone taxis in each city, the passenger user should be informed through a notification that this issue is observed in our application.
When the market itself determines the price, both the supplier and the consumer agree on the equilibrium point regarding the price, and Snapp, as a company, takes into account the requirements needed to optimize the pricing using various technology tools and artificial intelligence.
It is important and valuable for us to make a high number of trips on the Snapp platform, and we seek to maximize the number of trips we make, not to increase the price. Converting as many requests as possible into a journey is our goal, not an expensive sale.
The issue of removing the “I’m in a hurry” option was raised by the penal organization and the pricing debate was followed up by the legislative and regulatory bodies. I hope that this issue has nothing to do with the issue of mandated pricing, because even if we are looking for development in the field of digital economy and doubling its share, even in the slogan, cases like this, which appear to be of common benefit, actually cause service interruption to people and creating problems for them.
Therefore, from the beginning to the end, we are against mandatory pricing and we have stated our reasons repeatedly and in detail. A 15% target for the country’s digital economy has been considered in the 7th plan, which will affect the attractiveness of existing and new investments due to the restrictions that are created and the lack of cost-effectiveness of businesses.
We have to admit that command pricing is not suitable especially for private businesses that are looking to expand their business and are looking to respond to more demands. In addition, the pricing methods in the platforms are based on advanced technological tools, artificial intelligence and machine learning and are done very intelligently. All these factors question the function of command economy.
Any influence on the issue of pricing or the removal of “I’m in a hurry” will disturb the balance and order of the online market and we will witness the destruction of this area. I believe that the experience that digital economy businesses have in pricing can be used as a benchmark or a project that works well in other areas. We are looking for digital economy solutions to be presented to other industries and used instead of going back and pricing in a prescriptive manner.
Our target community is the entire transportation market, including offline and online. Our share of the whole market is less than 5% and our prices should be compared with the offline market according to the market and the common target community. If our prices are compared with the prices of the offline market, we will see that our prices are lower than the traditional and offline markets.
Another point is that even during peak traffic, the price of a limited number of our trips exceeds the telephone taxi tariff. When you visit this traditional market, you will see that none of the tariffs notified to us are respected in this market, and the prices in the offline market increase several times during peak traffic or special weather conditions. Due to the transparency in our platform, it can be seen that in certain weather or traffic conditions, the price increase in the offline market is significantly different from the online market.
In these comments, one more point is always neglected, which is the issue of paying attention to the driver users. There is very high inflation in different parts of the household portfolio, the car depreciation rate has grown significantly in the past few years, and also, the fuel quota of internet taxi drivers has not been given to them, and this issue has added more financial burden to these people.
The last week of the year is associated with the highest amount of traffic and intra-city trips, and the transportation conditions become extremely special due to the increase in requests and the decrease in the number of driver users. In a situation where the balance between supply and demand is upset, price fluctuations may occur to convert more requests into trips; However, we try to maintain the balance in determining the rate with smart solutions and we do not allow the travel rate to exceed one digit by setting the price ceiling. On the other hand, considering incentive plans for driver users, we try to encourage them to be more active.
As a platform, we are obliged to announce the navigation of driver users to the devices in charge of this area so that they can be given fuel quota. By gathering the information of internet taxis, these devices would deposit fuel quotas in Riyals for the drivers. We internet taxis do not receive or distribute fuel quotas; We only send this survey to relevant institutions.
This year too, we sent this survey on time, but this quota has not been deposited. All we could do was write letters and follow up. We have done this follow-up and we have also requested quota allocation for internet taxi drivers, but we have not been given a clear answer in this regard yet. Previously, we used to follow up with the Ministry of Interior and the Ministry of Oil, and the Ministry of Oil paid the quota to the drivers, but this did not happen this year.
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