The Snapp Doctrine: A Case Study in Problem Solving

In the Iranian years 1392 and 1393, I happened to have the opportunity to manage a private urban transport company. Our company managed around 1400 taxis and 220 buses. While I was assembling a team of industrial engineering and software specialists to reengineer and automate processes, I received several letters from an organization called Taxi-Yab expressing interest in working together.

At the time, I did not have the opportunity to meet them. The main rules governing our company were set and issued by supervisory organizations that were themselves under Tehran Municipality. There was almost no room for initiative, which was incompatible with the business model Taxi-Yab was proposing.

I do not know exactly what happened or how Taxi-Yab became Snapp. But Snapp alone has enough to say to fill a book. In this article, I will try to briefly touch on a small part of that story.

Reviewing the Facts and Figures

Snapp:

Activities: passenger transport by car; freight transport by motorcycle and pickup truck; passenger transport by motorcycle; food orders; grocery and supermarket orders; airline, bus and train tickets; medical consultation; hotel and accommodation reservations; and more.

Number of employees: 1546

Number of drivers/couriers: 2 million

Number of cities covered: 144

Average customer satisfaction: 4.7 out of 5

Tehran Taxi Organization and its 21 affiliated private companies:

Activities: passenger transport using Tehran's taxis

Estimated number of employees: 510

Number of drivers: 80 thousand

Peyk-e Badpa and its 220 affiliated agencies:

Activities: freight transport by motorcycle and pickup truck

Estimated number of employees: 490

Number of couriers: 3500

Data Analysis - Part One

To better understand the scale of Snapp's activities, it is useful to know that the country's largest ministry by employee count is the Ministry of Education, with approximately 783780 employees.

Of these, 63 percent are teachers, or around 493781 people. The remainder, approximately 289999 people, work in other departments.

Ratio of employees working in other processes to those working in the main process: 37 percent

Combining the data from the two organizations affiliated with Tehran Municipality, the Taxi Organization and Peyk-e Badpa, gives the following results:

Estimated number of employees: 1000

Number of drivers/couriers: 83500

Ratio of employees working in other processes to those working in the main process: 1.2 percent

Snapp:

Ratio of employees working in other processes to those working in the main service-delivery process: 0.077 percent

Important Point:

Unfortunately, Snapp's disaggregated data was not available, so the ratio above could not be calculated using only employees in passenger and freight transport. This means the actual ratio is lower than 0.077 percent.
In addition to Tehran, Snapp operates in 143 other cities.

Data Analysis - Part Two

The "ratio of employees working in other processes to those working in the main service-delivery process" in the Taxi Organization and Peyk-e Badpa is approximately 15 times that of Snapp.
The "ratio of employees working in other processes to those working in the main service-delivery process" in the Ministry of Education is approximately 47865 times that of Snapp.
Customer satisfaction at Snapp has been measured at around 94 percent. For the Taxi Organization, Peyk-e Badpa and the Ministry of Education, either these factors are not measured or the results are not publicly available.

Conclusion

When privatization is discussed, we repeatedly hear about the privatization model of companies such as Haft Tappeh Sugarcane, HEPCO and Arak Machine Manufacturing, rather than Snapp's model.
Although I witnessed commendable and admirable actions while Mr. Meysam Mozaffar headed Tehran's Taxi Organization, I do not believe in "a solution for the solution."

What does that expression mean?

When you create a dinosaur called the Taxi Organization to solve Tehran's taxi problem, your main concern then becomes providing the dinosaur with a place to rest, food and everything else it needs. In other words, looking after the dinosaur sidelines your original mission.

As I write this in Aban 1399 in the Iranian calendar, conditions are fundamentally different from those in 1392-1393, let alone when the Taxi Organization was established or five years from now.

The problem statement itself needs to be updated and then solved using today's capabilities. Some problems cease to be problems as time passes, just as the remedy for Sohrab only had meaning while he was alive and wounded.

In other words, what was the problem statement when the Taxi Organization was created? Was the main problem organizing taxis or providing passenger transport services?

As far as I know, Snapp's problem was not organizing taxis, although its solution organized many taxis far better than the Taxi Organization did.

The reason for Snapp's success was the same reason we failed in our company operating in this field.

At least until recently, Snapp presented and developed its solution free from the cumbersome procedures and rules of supervisory organizations, while those very rules prevented us from developing.

The Taxi Organization is not only a non-profit-making organization; it also lives off citizens' public resources, which could have been spent on more essential matters.

Of course, that is an achievement of its own: creating an organization 15 times larger than the private-sector equivalent, spending public resources and delivering poor results.

I am certain that if Snapp had been told it had to implement its solutions within the Taxi Organization's structure and framework, this Snapp would never have existed.

What I mean is that, wherever possible, advance reform through a parallel, independent organization and replace the old structure after results have been achieved.

From experience, I can say that the cost of resistance to change is directly related to the number of employees and the age of the organization. Usually, no senior manager pays that cost.

On the other hand, the cost of creating a parallel, independent organization is far lower than the cost of breaking resistance to change, an effort that ultimately remains fruitless and is wasted.

Postscript

Some figures have been estimated because information was unavailable. They may have changed by the time you read this article, although I do not think this would significantly affect the study's conclusions.
The article above is based on the author's opinions and personal experience. I humbly welcome readers' views and comments.
I admire Snapp because I worked in this field on a smaller scale and experienced its problems firsthand, even if many people consider Snapp a repeat of Uber.
The Ministry of Education's figures are included in this study only as a prompt for reflection. The nature of the services provided by these organizations is very different.
The number of active drivers in both Snapp and the Taxi Organization is lower than the nominal figures.

Sources

Websites of Tehran's Taxi Organization, Peyk-e Badpa and Snapp
IRNA News Agency
Gostaresh News

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