Taxi Market Braces for Pricing War

After shake-ups and changes in strategy following drivers’ protests last month, a new ride-hailing platform entered the market with cheaper rates, as other players also cut commissions after a court ruling.

Uber dropped its commission to 18 percent from 25 per cent after a court ruling while Bolt which is charging 20 per cent is also expected to cut its commissions after Uber failed in its appeal to reverse the ruling. 

Little Cab which targets mainly corporate customers is charging 15 percent.

The drivers drawn from Uber, Bolt, Little Cab, Yego, Maramoja and others faulted the companies for offering discounts to customers and asked them to lower commission charges from the current high of 25 percent to 18 percent.

“We remain committed to engaging with policymakers, raising the bar on safety, helping drivers grow their businesses, and improving the experience of riders,” said Uber head of East Africa, Imran Manji.

This window also saw Paris-based taxi-hailing app Yego being launched in Nairobi setting their commissions at 12 per cent, the lowest in the industry signalling interesting times ahead for the sector.

During the peaceful demonstrations held last week in Nairobi, Justin Nyaga, the Chairperson of the Organisation of Online Drivers said the taxi-hailing apps had not implemented earlier agreements on capping commission charged to drivers which were to begin on 20th September 2022.

Yego termed the current commissions charged by the taxi-haling companies as subjecting drivers to the slavery of the gig economy. 

“We are providing a customised solution for Kenya, one that has been purpose-built to free the driver community from the digital slavery of the Gig economy,” YEGO Global CEO and founder Karanvir Singh said.

Uber had earlier said that its commission charges cover promotional price cuts to attract riders, operating costs, health insurance on the trip for the driver and the passenger, and support of safety button technology for passengers and drivers in jeopardy.