Uber currently has only one category of product in the Kenyan market, UberX which is the basic product in most markets. Uberpool isn’t available in Nairobi, but there is the ride sharing option which I doubt anyone uses. Now after Uber lost the price wars to Little and Mondo Ride, they had to think again how to get back some credits.
Currently, it’s cheaper to ride with Little with the Basic option and Uber must have felt this. I have also heard from a few people that Mondo ride is even cheaper with an interesting revenue share that drivers prefer to Uber’s
The price wars sometime back had Uber and Little battling to see who could give the lowest rates to riders. And it was going well till Uber drivers went on strike demanding a review of the fares. And it was nasty. So nasty that Uber was ejected from the Mirage office location because of the rioting drivers.
When the company yielded they increased the rates to KES 42 per kilometer and a base fare of KES300 up from KES 35 per kilometer and a minimum fare of KES 200. Even though Taxify followed them right after with a price increase, that left Little came out swinging and in such a recently converted market, the price wins at the end of the day.
And it seems Uber felt it.
Uber a few minutes ago just announced that they are introducing a new product and with it comes new car types allowed onto the system. They are encouraging the small and old cars they had rejected earlier (Hatchbacks and old cars beyond 2008 as year of manufacture weren’t allowed). They specifically recommend driver partners to sign up their 1000 cc Toyota Vitz. Uber is more keen on low cost fuel efficient cars between 800 and 1000 cc engines, but are welcoming all types of cars.
Ever wanted to be an Uber partner? Uber is now accepting vehicles OLDER than 2008 for its low cost product. https://t.co/rpiLjcMBED
— Uber Kenya (@uber_kenya) April 27, 2017
This would naturally enable them to compete with Little’s Basic product that has 1000 cc cars as it’s mainstay. The new product which will be priced cheaper than UberX will be a second option within the Uber app and will assist Uber price their offering downwards without touching the existing UberX drivers. UberX driver partners will still be able to sign their cars up to the new product, let’s assume they go with UberZ.