Taxify Declines to Adjust Fares to Reflect Increased Fees on Fuel

Taxify comfort announced in Nairobia

Taxify comfort announced in Nairobia

While most routes have seen an upward revision of bus fares owing to the 8% VAT on petroleum products, e-taxi app Taxify will not re-examine its rates to align to these changes, at least in the next couple of weeks. The platform’s driver partners have been lobbying for adjustments for the said fees, but the Estonia-headquartered Uber rival’s management says it will not increase fares or commissions for its local activities.

At the moment, Taxify users pay KES 20 for every kilometer covered, a figure that does not resonate well with drivers. The argument here is that the 8% VAT slapped on oil-based products has demonstrated far-reaching effects in terms of living costs. What is more, the drivers are unhappy after Taxify slashed base fees sans amicable consultations.

The app’s Kenya Operations Department insists that the fares will remain unchanged unless stated otherwise. The reluctance to amend the fees forced a group of Taxify drivers to down their tools sometime last week. The drivers argued that Taxify ignores the definitions of the MoU between the parties, which has a clause supporting fare adjustments if the cost of operating a vehicular device changes.

Should the MoU be adhered to, which we largely suspect it will, then cab hailers will part with KES 4 per minute, which translates to a 100% jump from the KES 20 per kilometer for KES 40. The minimum fare will also be capped at KES 300 and KES 100 as standard fare. Obviously, these numbers, while good for drivers, will make a lot of users angry, which explains Taxify’s unwillingness to initiate changes.

To contain the backlash, Taxify has also adopted an incentive-based approach employed by the likes of Uber to reward high-performing drivers. Whereas Uber introduced exclusive services with high returns for drivers aka UberSELECT for premium riders, as well as loan services for the UberCHAPCHAP crew (the app launched in Mombasa the other day, but for the city’s popular 3-wheel vehicles popularly known as tuk-tuk), Taxify has, on the other hand, been rewarding highly rate drivers with increased bonuses and healthcare services, among other gains.

The tussle between e-taxi drivers and platform owners has been around for some time now. The rivalry has also been fueled by bad blood between them and traditional taxi services that feel their revenues have dwindled significantly due to the disrupting nature of technology.