According to CAK, Uber’s revenue market share of 30.63 per cent and fleet stake of 28.6 per cent is below the threshold required to make a player dominant.
The Kenya Taxi Cab Association (KTCA) and Little Cab had separately petitioned Parliament, claiming that Uber’s pricing amounted to abuse of dominance.
The Kenya Taxi Cab Association (KTCA) and Little Cab had separately petitioned Parliament, claiming that Uber’s pricing amounted to abuse of dominance.
The minimum fare increased to Sh300, up from the Sh200 previously charged.
The competition regulator has declared Uber a non-dominant player and asked Parliament to dismiss a petition asking the State to set minimum taxi charges.
Uber’s revenue market share of 30.63 per cent and fleet stake of 28.6 per cent is below the threshold required to make a player dominant, the Competition Authority of Kenya (CAK) told the National Assembly’s Transport committee yesterday.
CAK director-general Wang’ombe Kariuki said Uber prices of Sh42 a kilometre stand way above the Sh15.16 required for a taxi operator to break-even, terming the cab charges competitive and enough to attract new entrants into the business.
The Kenya Taxi Cab Association (KTCA) and Little Cab had separately petitioned Parliament, claiming that Uber’s pricing amounted to abuse of dominance and demanded that the competition authority sets minimum taxi charges.
“Fixing of minimum (floor pricing) prices as requested by the petitioners will only benefit the taxi operators, extinguish efficiencies and innovation and quality to the detriment of consumers,” said Mr Kariuki.
Uber drivers took to the streets at the beginning of the month, demanding reversal of the 35 per cent price cut that the company effected in July last year.
About a fortnight ago, Uber increased its fares from Sh35 to Sh42 per kilometre in Nairobi, giving in to pressure from its drivers and MPs.
The minimum fare increased to Sh300, up from the Sh200 previously charged.
The drivers and MPs had sought higher fares, arguing it would benefit thousands of independent contractors and level the playing field for other players.
Mr Kariuki disclosed the market share of Uber’s rivals Little Cab as (fleet 34 per cent, revenue 9.95 per cent) and the KTCA (fleet 10.7 per cent and revenue 28.10 per cent) concluding that none had accumulated enough market power to warrant regulatory intervention.
“In view of the foregoing, it is therefore recommended that the petition and specifically in respect of abuse of dominance be dismissed,” he told the committee chaired by Starehe MP Maina Kamanda.
On March 1 2017, Little had forwarded a complaint to CAK alleging that the Sh35 per Km pricing by Uber amounted to abuse of dominance.
Mr Kariuki said that an undertaking can only be deemed to be dominant if it has a market share of between 40 per cent and 50 per cent.
At the time it entered the Kenyan market some two years ago, Uber was charging Sh60 per kilometre, before adjusting it lower to Sh35 per kilometre, just a day before competitor Little Cab came into the picture.
Mr Kariuki argued that fixing the minimum price will not benefit the consumers but the rivaling companies and that CAK will hesitate to support such a proposal.
He dismissed allegations that the Authority had held meetings with Uber had changed tune to appear as though it was coming.
