Uber to Raise Fares in Two Weeks Citing Fuel Price Surge

Uber Kenya is set to increase fares in the next two weeks following demands from drivers citing increase in fuel prices. Uber head of East Africa, Imran Manji, said the company is working on a price review.

According to Manji, the company will try and find “ a sweet sport between not destroying demand by pricing and ensuring that drivers cover their costs.” This follows the rise in fuel prices by Ksh 9 per litre that was announced on Tuesday.

“We are looking at the pricing, and there is more chance that not that we will be reviewing our rates upwards in order to factor that fuel price increase,” said Mr. Manji.

The cost of super petrol is currently retailing at Ksh 159.12 and Ksh 140 respectively in Nairobi. This marks the fourth consecutive increase in fuel prices since February.

Divers of Digital Taxis have in the past protested about the high cost of fuel eating into their earnings. The increase in fares to be adopted is in efforts to help drivers cover their cost, make earnings and keep them on the app.

The news comes on the background of increased cost of living and 27-month inflation in the country. This further puts digital taxi companies like Uber in a more difficult situation of price review.

“It’s a difficult situation in the market right now because the cost of living of everybody goes up, the affordability of things like ride-hailing comes into question. If we raise our prices too high; when the majority of people are already feeling price pressure on daily necessities, we are limiting how many people are going to be using our services and also limiting the driver of earnings,” added Manji.

Currently, the low price and most preferred service, Uber Chap Chap charges a minimum of Ksh 150 and maximum of ksh250 per kilometre. The more expensive UberX service, on the other hand, charges a minimum of Ksh 200 and a maximum of Ksh 380 per kilometre.

“So with the analysis, we will try to see if fuel is 35% of drivers’ typical costs and fuel has gone up by a maximum of 10%, we are looking at a 3.5% increase,” said Manji.