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Uber, Bolt in fresh shake-up as State moves to set taxi fares
Uber and Bolt cabs. The Transport ministry plans to introduce a national taxi pricing model aimed at stabilising fares and driver earnings across ride-hailing platforms.
The Transport ministry is set to deploy a new national pricing model for both conventional and ride-hail taxis, setting the stage for a fresh shake-up for big players in the industry, including multinationals Uber and Bolt.
A work plan showed that the State targets to review driver and operator cost structures to determine minimum viable fares, and design a fare structure including the base fare, distance, time rates, minimum fare, and surcharges.
The Transport ministry said the absence of a national taxi policy is fanning chaos amid price undercutting fights among rival taxi companies and operators, as well as widespread complaints about low earnings that often fail to cover key expenses such as insurance, maintenance, and wear and tear.
“The absence of a clear taxi policy regime has led to various challenges, including disputes, low earnings, opaque pricing formula, compromised service quality, unstable market dynamics, and regulatory inconsistencies,” the ministry said.
“Thus, a national taxi policy is needed to balance and ensure affordability for passengers, fair returns for drivers and vehicle owners, facilitate healthy competition, driver welfare, safety and security, and industry growth,” it added.
Kenya has, since 2014, registered a major surge in the number of both local and international taxi-ride hailing app operators or transport network companies (TNCs), especially around key towns, fueled by a rapidly growing middle-class population, which has access to smartphones and affordable internet connectivity.
Industry surge
Data by the Transport ministry shows that about 35,000 drivers are presently enrolled on the ride-hailing platforms in Kenya, with most drivers cross-listed with different apps. On average, they collectively complete approximately 175,000 rides/trips per day across all network companies nationwide.
The growth in the taxi industry has, however, triggered clashes among players, including conventional taxis versus the ride-hailing taxis; ride-hailing app companies versus drivers or vehicle owners; ride-hailing drivers and vehicle owners versus passengers.
Pressured by complaints by drivers and taxi owners, the Transport ministry, through the National Transport and Safety Authority (NTSA), developed the Transport Network Companies, Owners, Drivers and Passengers Regulations 2022, which contained a raft of provisions, including the capping of commissions charged by TNCs such as Uber and Bolt at 18 percent.
Commissions row
The capping of commissions has, however, failed to stop the fights among industry players amid conflicting interpretations of the rules.
“The issue of capping commissions in the ride-hailing industry remains highly contentious - with some ride-hailing drivers and vehicle owners supporting the capping of commissions, arguing that the earnings are sustainable,” the Transport Ministry admits.
“Whilst others, including ride-hailing app owners, argue that capping of commission will be an obstacle to a vibrant free marketplace, thereby reducing investment, discouraging innovations, and ultimately disadvantaging Kenyan consumers.”
Global benchmark
Faced with this dilemma, the State now says it targets a new national policy that would attempt to end the fights, hoping to benchmark on other jurisdictions such as South Africa, the EU, the UK, and Singapore.
“The overall objective is to develop a national taxi policy that provides a coherent, sustainable, and harmonised framework for regulating, managing, and promoting safe, efficient, inclusive, and sustainable taxi services in Kenya,” the ministry said.
The work plan showed that the State would review the existing taxi policy and regulations, including those covering boda boda, tuk-tuk, and e-bicycles.
Bolt acknowledged the planned changes, noting that it supports a sustainable transport ecosystem.
“We are aware that the ministry has been reviewing aspects of the current regulatory framework. As discussions are ongoing, it would be premature to comment on specific proposals. We remain committed to engaging constructively with the authorities to support a balanced and sustainable transport ecosystem,” Bolt told Business Daily.
