NAIROBI (Xinhua) --
Since its launch in Kenyan capital Nairobi in
2015, U.S. taxi-hailing firm Uber has caused excitement and
anxiety in equal measure.
Those excited were consumers
who saw the firm as godsend as it was offering lower charges
than what was in the market.
Besides, the idea of just dialing a button on one’s
smartphone to call a cab was novel in a country where
smartphones rule the roost.
On the other hand, those who were anxious were the
traditional taxi drivers, many who relied on loyal customers who
they were charging for as much as 10 U.S. dollars for a
To them, Uber was going to cannibalize their business.
And as expected, the taxi-hailing app disrupted the market in
Kenya as it swept off the feet of excited consumers, many of
whom were eager to use it to save money and remain trendy.
In the process, Uber recruited hundreds of drivers in its
fold to serve the rising numbers of customers as rivals,
including Taxify and Little Cab apps, emerged.
John Musomi is among drivers in Nairobi who joined the Uber
bandwagon as it took the industry by storm.
"I joined Uber sometime in November 2015 after working as an
independent driver for three years.
"For me, it was a great opportunity because business had gone
down and I could no longer rely on loyal customers," he told
To ferry someone from the central business district in
Nairobi to Westlands some 5km away, Musomi would initially
charge up to 8 dollars.
But with Uber, his calculation would come to about 5 dollars.
Musomi however said things were good because he would get
alerts on the next customer to pick as soon as he dropped
someone, meaning he could do more trips.
The game-changer, for Uber and its taxi drivers, however came
in July 2016 when the firm cut its prices by 35 percent
following a price war with competitors.
In the new scheme, customers were to pay a dollar (base fare)
plus 0.35 dollars cost per kilometer, plus 0.03 dollars cost per
The minimum charge was then dropped to 2 dollars while the
cancellation fee stayed at 2 dollars.
According to Uber, the fare cuts doubled its Nairobi
passenger numbers by between 70 and 100 percent.
"Based on our results, our driver partners have had a 100 per
cent increase in new rides per week, this means that the price
cut has doubled the amount of new riders for driver-partners,"
said Uber in a statement in November last year, adding they
continued to have 100,000 unique people opening their app every
But as Uber celebrated, the drivers started to grumble noting
the firm was engaging in restrictive trade practices by capping
the fares at 0.35 dollars per kilometer with a minimum fee of 2
In July last year, as soon as they cut fare, more than 800
drivers through the Digital Taxi Association of Kenya filed a
court case in which Uber was sued for engaging in bad trade
The drivers claimed that the move was an attempt by the
company to create a monopoly in the taxi industry.
The matter boiled over late February when the Uber drivers
went on strike demanding for higher rates. The drivers further
accused the firm of keeping 25 per cent of what they make
leaving them with so little.
Their plight was worsened by rising cost of fuel, which
reduced their income by up to 20 percent.
A liter of diesel currently goes at 0.90 dollar while petrol
at 1 dollar.
"The maximum I can be paid for a kilometer journey following
the revised rates is 4 dollars.
"Uber takes 25 percent of the money, which is about a dollar.
"Then I have to pay for fuel, pay myself, the owner and
maintain the car.
"What one ends up with a day is so little the reason why we
are on strike," said Simon Karima, an Uber driver.
He told Xinhua that the charges are exploitative and no
longer untenable and that they would not back down until they
"The problem is that a driver normally does not know what is
the charge until they reach the destination.
"So you may drive for three kilometers and the app tells you
the charge is 6 dollars, which is so little that one wishes if
they knew before, they would cancel the journey," said Karima.
The drivers, according to Karima, also want Uber to start
charging immediately upon request for taxi, not when the client
gets into the car.
"We also want Uber to reduce its percentage.
"Getting 25 percent for each journey is exploitative," Karima
Early this week, the government, through the transport
ministry, has called on Uber to audit its pricing mechanisms to
address any challenges posed by operating in a fluid environment
where economic drivers change often.
Transport Principal Secretary Irungu Nyakera said the
ministry has recommended a raft of measures to Uber, the drivers
and the owners to facilitate a return to normalcy within the
shortest time possible.
Uber officials in Nairobi have remained mum as the stalemate
enters a second week.