Safaricom-backed online taxi-hailing app Little Cab has sparked off a price war with rivals Uber and Mondo Ride by setting lower tariffs compared to its two global competitors.
Little Cab, developed by local IT firm Craft Silicon, is charging passengers Sh55 per kilometre and Sh4 per minute – with no flat base charge or price surges during peak hours or heavy traffic jams.
The e-hailing app set to be formally launched next month is banking on the lower fare to woo passengers to the platform and gain market share in the lucrative but currently chaotic taxi industry.
“We want to offer a value to our customers. We have noted that cost is not transparent among most of the apps that are in the market,” said Kamal Budhabhatti, founder of Craft Silicon.
“We are still on a pilot,” said Budhabhatti, who revealed that Little Cab had signed more than 1,000 cabbies, mostly from Easy Taxi which exited the Kenyan market in May.
Safaricom will offer wireless Internet in all Little Cab taxis and jointly with Craft Silicon, give its drivers free Samsung smartphones.
Uber charges in Kenya are priced at Sh60 for every kilometre covered and Sh4 per minute in addition to a base fare of Sh100.
The US, San Francisco-based taxi e-hailing giant also has price surges, where it increases rates by a multiple, say 1.5 times, in the event that demand cannot be met by the number of cabs in service.
“There is no price surge concept. We decided to keep things simple, easy and transparent,” said Mr Budhabhatti in an interview.
Mondo Ride charges Sh58 per kilometre and Sh4 per minute; in addition to a base fare of Sh100.
The Dubai-based taxi app with Romanian roots – which has more than 1,000 active drivers in Kenya - similarly does not levy any surges, according to Joar Lindh, head of Africa at Mondo Ride.
Nairobi metropolis is estimated to have more than 10,000 taxis each doing an average of four trips daily, according to official data, valuing the capital city’s taxi business at Sh20 million a day.
This has whetted the appetite for investors with Kenya emerging as a battleground for taxi hailing apps - where platforms such as Uber, Little Cab, Pewin, Maramoja, and Mondo Ride have pitched tent - underlining Nairobi’s position as a tech hub.
Little Cab has set the minimum fare at Sh270; which is lower that Uber’s price floor of Sh300 but higher that Mondo Ride which charges a minimum fare of Sh200.
Uber has 1,000 drivers in Kenya and expanded to Mombasa in March, having so far logged eight million kilometre journeys since launching in Nairobi in January 2015.
Mr Budhabhatti declined to reveal how much drivers will be charged to use the Little Cab app, but intimated that they will be offering cabbies a bigger slice than rivals.
Mondo Ride takes Sh50 per ride as commission while Uber chops off 25 per cent from drivers’ revenue.