Driver Go-Slow Forces Uber Kenya to Cut Service Fee From 25 to 18 Percent

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If you use taxi apps in Kenyan cities and towns, where services such as Uber, Bolt, and Little Cab exist, then you should be aware that driver partners have been airing their grievances about how their employers are treating them in terms of compensation. The issue has mostly been affecting Uber drivers, who, as of last week, had decided to strike. Many riders were unable to book Uber cabs, which forced them to use other apps such as Little and Bolt.

To note, the issue has been about the cut Uber takes from driver-partners. Uber was taking a premium commission at 25 percent in a market where others such as Little charge 15 percent. That number (25 percent and its variations) had been arrived at a couple of years ago when the apps collectively increased their rates. This meant that drivers had to dig deeper into their pockets to remit their commission to the digital taxi apps.

However, a few months ago, the rates were adjusted again following an intervention from Kenya’s Ministry of Transport and Infrastructure. According to the former Transport Cabinet Secretary (CS), all e-taxi driver-partners had to remit 18 percent of trip commission to their digital taxi operators.

The commission which shall be paid by a transport network driver or a transport network owner to the transport network company, which shall not exceed eighteen percent of the total earnings of the trip. A transport network agreement shall not include terms or conditions designed to increase the commission payable by a transport network driver or transport network owner such that it exceeds eighteen percent of the total earnings per trip – states the regulations.

While Little maintained its rates, Uber did not, at least in a timely manner, adhere to the regulations. It is for this reason, among others such as the high cost of gas, that forced drivers to strike. This painted a bad picture in terms of how Uber addresses driver grievances, which is why it has reduced the charges from 25 percent o 18 percent – adds the regulations.

You can also argue that Uber has been compelled to do this, bearing in mind that it just cannot ignore local regulations and that Kenya is one of its biggest markets after it left Tanzania. Uber has also been on an expansion spree, and can now be found in Naivasha, Kisumu, and Gilgil, among other towns/cities.

Contrastingly, Bolt has the largest network in the country, as it operates in 16 towns. The company has also opened a regional office in Nairobi that will serve as a nerve centre for Africa operations.

These concerns had escalated in the past couple of weeks when Uber drivers could tell their riders that they couldn’t do long trips because of the poor returns. In some cases, an Uber driver could ask a rider to cancel a trip if he/she received a request from a rival service such as Little, whose rates, as said, are favourable to the driver.

“We are committed to Kenya and will continue to find workable solutions that benefit both riders and drivers using the platform as well as the business,” says Imran Manji, Head of East Africa for Uber.

“Since our launch, Uber has been actively working with regulators to help shape the future of ride-hailing in Kenya. This has been our aim since we launched in Nairobi in 2015, and we have stayed true to that.”

Imran concludes, “We are certainly excited about our future in Kenya. We remain committed to engaging with policymakers, raising the bar on safety, helping drivers grow their businesses, and improving the experience of riders.”

Uber has also launched Uber XL and Uber ChapChap Share in Kenya. Uber XL provides seating for up to 6 people and extra luggage and is great for airport trips and even for groups who are making a business trip. It is basically normal Uber, but with a larger vehicle/van. Uber ChapChap Share, on the other hand, is an option for a shared ride that gives up to 30% of savings on trip fares, when a rider is paired with a co-rider.