Iranian ride-hailing giant Snapp accused of anti-competitive foul play

Iranian ride-hailing giant Snapp accused of anti-competitive foul play
Snapp claims it's stayed within the bounds of fair competition. / CC: Asr Iran
By bne IntelIiNews April 11, 2023

Snapp, Iran’s ride-hailing giant, has been accused of engaging in an anti-competitive practice by Tapsi, a rival company, IT Iran reported on April 10.

The accusation relates to the alleged use of 1,000 SIM cards by Snapp to create “passenger” user accounts in Tapsi’s system and access the contact information of around 14,000 drivers providing Tapsi rides.

Iran’s Competition Council has concluded that Snapp has committed an anti-competitive practice and must pay a fine. However, Snapp, in a release sent to local media, denied the accusations.

Snapp claimed that the purchased SIM cards were used to conduct market research that included monitoring internal services of Snapp and those of other companies. The information gleaned, it said, was used to formulate incentive plans, improve times in accepting requests and improve the rate in accepting requests.

In response to Snapp's denial of any infringements, Tapsi said it would file a complaint in the judicial system.

According to Tapsi, Snapp has drawn away 14,000 of its trained and employed drivers.

Snapp has previously been accused of anti-competitive behaviour. In 2016, the company installed its app on the phones of Tapsi drivers. On that occasion too, a complaint was filed with the Competition Council.

Snapp has a 90%-share of Iran’s internet taxi market.

The company stated that it adheres to transparency and standard performance in accordance with the law to maintain a healthy competitive environment in the market.

Snapp said that the accusation of using anti-competitive methods to covertly attract driver users was completely false, partly because the driver users are not the official employees of any ride-hailing firm.

In recent years, the ride-hailing market in Iran has seen significant growth and intensified competition. Domestic companies such as Snapp and Tapsi have emerged as major players, holding off newcomers like Yandex Taxi from Russia.

As of 2021, Snapp claimed to have more than 20mn registered users and over 1.5mn drivers in its network.