Defending Tapsi: Competition Consult and Advocacy Against Anti-Competitive Practices in Iran’s Online Ride-Hailing Market

Iran’s digital economy is in its infancy, making fair competition vital for fostering growth and innovation. When Tapsi, an emerging Iranian ride–hailing platform, approached us with a serious competitive challenge, We recognized the significance of their challenge and the urgency of finding a solution.

Tapsi had established itself as a reliable and trusted service provider in the market, competing against other ride-hailing platforms; particularly Snapp, the dominant market player. However, Tapsi discovered that Snapp was engaging in unethical strategies to undermine Tapsi’s operations. These tactics included attempts to poach Tapsi’s drivers and erode its market share, threatening not only Tapsi’s business but also the competitive balance in the market.

To address this, we conducted a comprehensive analysis of the ride-hailing market in Iran. As a result, the industry characterized by a few players, was particularly susceptible to concentration and unfair practices. BANA conducted profound research to define the market boundaries, analyze competitive dynamics, and assess the relationship between the drivers and platforms, providing the foundation for our strategic approach. We defined the relevant market, based on a two-sided market approach and analyzed the market power of each firm based on the number of daily orders and trips, as a proxy of market share.

Also, our investigation revealed a systematic effort by Snapp to disrupt Tapsi’s operations. By analyzing the data from drivers’ accounts , we were able to identify a deliberate strategy to lure Tapsi’s drivers to join Snapp. These actions were not only unfair but also a clear violation of competitive principles. Snapp’s team would order a significant amount of trips and,after matching to a driver, would access the information of drivers and cancel the trip. In  a one-month period, the cancellation rate of Tapsi rose to more than 50 thousand. After the cancellation, they would systematically contact the drivers to try to poach them into their platform.

Equipped with these findings, we prepared a detailed legal memorandum for Tapsi to present to Iran’s Competition Council. The memorandum outlined the market structure, the harmful impact of Snapp’s practices, and the damages incurred by Tapsi. It also highlighted the broader implications of these practices for market integrity and consumer welfare.

Moreover, our analysis quantified the harm caused by Snapp’s actions, including financial losses, reduction of service quality, and diminished opportunities for drivers. By presenting compelling evidence and well-reasoned arguments, we helped Tapsi demonstrate the urgent need for intervention. In this project, by analyzing data and through econometric analyses, particularly Difference-in-Difference, we provided a clear picture of the effect of Snapp’s actions. We were able to clearly show the decreasing number of daily trips and consequently, the decrease in Tapsi’s revenue.

After a thorough review, the Council ultimately ruled in Tapsi’s favor. Snapp was found guilty of anticompetitive practices and faced significant penalties. This landmark decision protected Tapsi’s business, and also set a crucial precedent for fair competition in Iran’s digital markets, reinforcing the importance of fair competition in sustaining a dynamic and innovative economy.

For our firm, this project exemplifies the power of meticulous research and strategic advocacy. This case remains a highlight of our work, demonstrating our commitment to supporting clients as they navigate complex challenges and achieve meaningful outcomes. It serves as a reminder of the importance of creating a level playing field in every industry,  particularly in emerging markets where competition drives progress and opportunity.