Late last week, Uber Kenya announced it was slashing the prices of rides by upto 35%. The company has in recent times faced intense competition from new entrants such as Little Cabs which could have informed the decisions to cut prices. In addition, sources intimated that growth of the service in Nairobi had plateaued and the price slash was meant to ignite growth in the Kenyan market.
In the new order, Uber slashed the charges for every minute spent on the ride from Kshs. 4 to Kshs. 3; charges per kilometer from Kshs. 60 to Kshs. 35 and dropped minimum charges from Kshs. 300 to Kshs. 200. The new charges took effect last week Thursday. Uber Kenya hoped the reduced prices would ignite demand from consumers giving drivers a chance to make more money off volumes of rides. The company also announced it was instituting guarantees for its drivers for every hour they spent on the Uber App. Through guarantees Uber drivers will earn Kshs. 150 for the 79 peak hours and Kshs. 450 for the 69 off-peak hours.
The price reduction seems not to have settled well with drivers who are currently holding protests against these changes. Uber East Africa GM told Techweez last week that he had spoken to over 1,500 drivers in a bid to make them understand the dynamics of the move. The demonstration are similar to those that followed a similar price reduction in CapeTown South Africa. Uber later reversed its decision in Capetown. We shall definitely follow these developments and keep you posted.