Online taxi hailing company Taxify has introduced demand-based charges, also known as ‘surge’ pricing, as it seeks to attract more drivers to its platform.
The company introduced the pricing two weeks ago “to motivate drivers to go online during periods of high demand”.
This pricing mechanism allows the cab-hailing firm to temporarily raise prices on its platform when the number of rider requests shoots up. Unlike its main rival Uber, Taxify has not been raising prices during peak demand.
“Dynamic pricing was introduced to encourage drivers to go online during seasons of higher demand,” said the company in a response to the Business Daily queries.
Taxify hopes to use price surges to better compete for drivers with market-leader, Uber.
During periods of high demand, drivers who have signed up to serve multiple platforms sometimes opt to work with Uber, whose surge pricing raises their profit margins.
The promise of higher profits is especially useful for competition as drivers with cab-hailing companies have frequently complained of poor earnings, sometimes even down their tools in protest.
Taxify said even with surge pricing its services would remain “affordable” to Nairobi residents.
The competition for drivers is usually most visible in Nairobi during bad weather or matatu strikes when public transport users opt for taxis.
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