The Ministry of Transport on Tuesday agreed to sign an MoU with digital taxi drivers after a lengthy meeting to iron out grievances that saw them down their tools last week.
Transport principal secretary Paul Maringa, who chaired the talks at his Transcom House office, said the department had agreed to sign an MoU with the drivers that includes a pricing structure.
“We agreed that nobody can change the pricing unilaterally. The process should be consultative and cushion drivers,” Prof Maringa said.
A rapid response system is to be set up for rescue and security of drivers, the PS said.
Sources told Shipping that the MoU will be signed at 2pm on Wedneday.
There would further be quarterly consultative meetings of all players chaired by a Ministry of Transport official and the minutes cascaded to industry members.
“The MoU is ready for inking, which should be done by end of the week. We will have one final meeting before making the resolutions public,” the PS said.
A team of lawyers will prepare regulations to be anchored into law to guide the sector. During the meeting that followed others held last week, it was resolved that licensing of vehicles should follow the normal legal regime and meet local and international standards.
Asked if the drivers were still on strike, Prof Maringa said: “We had agreed all along that they return to work because the negotiations were on and that there should be no violence.”
Yesterday’s meeting brought together at least 12 representatives of the digital taxi drivers together with their lawyers. The ministry had already held talks with the drivers and service providers. Among firms represented at he meeting were Uber, Mondo, Little Cab, Taxify, Fone Taxi and Mara Moja.
Also present were National Transport and Safety Authority officials, traffic police and Nairobi County government which was represented by Transport boss Ahmed Gadane.
The drivers paralysed operations last week in what they termed as exploitative corporate practices. They claimed the firms were charging low rates and imposing high commissions on them, leading to them working for long hours with little pay.
The Digital Taxi Association of Kenya represents more than 2,000 drivers. The drivers said client charges had reduced over time as more digital taxi apps enter the market, but their commissions to the taxi firms had remained the same.
They want a review of their rates and working conditions. Through their association, they want their clients’ rates doubled and driver commissions to companies reduced so they can earn decent wages.
Uber charges a 25 per cent commission on each ride, while Taxify charges 15 per cent. The drivers want rates per kilometre doubled, and commissions slashed to 10 per cent.
Kenya Digital Taxi Services Director David Muteru confirmed yesterday’s meeting with the Department of Transport.
Prof Maringa was upbeat that the drivers’ complaints would be addressed. “We have informed the providers that once harmonisation of their proposed way forward is finalised, an MoU will be prepared for concurrence,” Prof Maringa said.
Regulations governing the sector will be developed “with full stakeholder involvement before formal legislation.”
Last week, it was agreed that each of the service providers including Ride Share Sacco Society, Digital Taxis Association, and Public Transport Operators Union address each of the issues raised and propose how to resolve the concerns.
Each of the companies was told to make a 15-minute presentation to the government and address the issues raised including specific measures to be taken to address pricing concerns raised by the drivers. The other issues were development of a consultative framework for continuous engagement between drivers and app owners, recognition of the drivers’ association, safety and security of drivers and passengers.
The operators complained that 18 drivers had died since November last year following carjacking incidents.
The operators also called for regulation of digital and online taxi services and companies.
They complained over low fare charges by digital app companies without any consultations to the drivers and third party owners and collusion by big operators to use low pricing to kick out competitors.
The operators raised concern over increased accidents and deaths due to fatigue as drivers work many hours to break even with most of the incidents happening between 2 am and 5 am.
The said introduction of 800 cc vehicles “whose safety standards” are in question was being used “as a guide to pricing while most operators had already bought vehicles of higher capacity for the business.”
The players want use of AA of Kenya recognized rates per kilometer based on fuel consumption and vehicle maintenance to determine pricing.
Digital taxi drivers went on strike last week demanding that online hailing firms raise the prices of rides.
The Monday strike, which was later suspended amid negotiations with transport sector stakeholders, resulted in higher prices, longer waits and ejection of riders from taxis that continued to operate.
The Digital Taxi Association of Kenya (DTAK) said prices are so low that they can neither maintain their cars nor earn salaries from them.
After Uber drivers went on strike in September, the company increased the prices of rides to Sh 42 per kilometre. However, in the absence of a written agreement, they have been reducing them since.
Currently, Uber takes the highest commission at 25 per cent, charging riders Sh16 per Kilometre for Uber Chap Chap and Sh27 per Kilometre for Uber X. Taxify charges as little as Sh14 per kilometre and 15 per cent commission.
The drivers want that hiked to at least Sh60 per kilometre and for commissions to be slashed to 10 per cent. They say many of the cars cost at least Sh 45 per kilometre to fuel and maintain.
DTAK petitioned Parliament last month to regulate price warfare among digital taxi companies but were directed to the Ministry of Transport.
Last month, Uber reduced the maximum working hours from 18 to 12 hours but the drivers want the company to address the underlying issue of their low wages.
Two weeks ago, Taxify sent drivers a text forbidding them from asking riders where they were headed before picking them up, amidst concerns that drivers cancel trips that cost very little. However, the drivers said trips to certain areas such as Kayole, Kiambu and Gachie could turn deadly for drivers.