Uber gives in to pressure to increase fares

Taxi-hailing app company Uber has now increased its fares, giving in to pressure from their drivers and MPs.

Drivers and MPs have sought higher fares, saying it would benefit thousands of independent contractors and level the playing field for other players.

In Nairobi, it will now cost Sh42 per kilometre, up from Sh35, and the minimum fare has been increased to Sh300, up from the Sh200 previously charged.

The base fare remains at Sh100 and the fee for time spent on the road remains Sh3 per kilometre.

In Mombasa, the price per kilometre is also up to Sh42 while the minimum was increased to Sh200 from Sh150.

The base fare was increased from Sh50 to Sh70.

READ: Uber talks with Kenyan drivers collapse over new contract terms

'Driver-partner economics'

“We have always promised to closely monitor driver-partner’s economics; keeping cognisant of how inflation and fuel prices can affect drivers using our app.

"We continue to stand by that promise because Uber succeeds when our partners succeed,” the company said in a statement late Wednesday.

“That is why today we are raising our prices in Kenya. We believe driver-partners will earn more as a result of these changes and that riders will continue to enjoy access to a safe, affordable and reliable service,” the company said.

Officials from the company and the chairman of the National Assembly’s Committee on Transport had at a meeting last week suggested that a middle-ground had been agreed upon between the company and the Transport ministry.

Starehe MP Maina Kamanda, the chairman of the parliamentary committee, wanted the company to increase the fare to Sh60 per kilometre and said even Sh45 would be unacceptable.

The company used to charge Sh60 per kilometre when it entered the Kenyan market two years ago.

It would later drop the fare to Sh35 per kilometre, just a day before competitor Little Cabs came into the picture, in what it said was a bid to get more people using the app.

Petitioned Parliament

But car owners and the independent contractors who use the app to locate customers ended up complaining that their take-home pay had reduced significantly.

Last month, they submitted a petition to the committee chaired by Mr Kamanda.

Pressure on the company was also increased by the submission of a petition to the same committee by members of the Kenya Taxi Cab Association, who asked the MPs to come up with a way to regulate the sector.

The committee is mulling over the idea, which would face legal questions because Kenya is a free market economy, but base their assertions on the fact that there is already price regulation for fuel.