Kenya’s National Transport and Safety Authority (NTSA) is set to enforce a regulation that caps commission for all ride-hailing companies in the country at 18%.
This is because something similar happened in Tanzania a few months ago.
Earlier this year, Tanzania’s Land Transport Regulatory Authority (LATRA), which regulates the taxi sector, restricted commissions earned by ride-hailing companies from a maximum of 15%.
Also Read: Uber suffers defeat in Kenyan court, lessons for Ghana
After the announcement was made, Uber, which charged its drivers a 25% commission, exited Tanzania. Months later, Bolt toned down its offerings, announcing that it would only provide its services to corporate clients.
For operators like Bolt and Uber, it’s bad news. This time, however, Uber is choosing fight instead of flight. Last week, TechCrunch reported that the company is contesting the regulation with an appeal to the Supreme Court to nullify the decision.
Uber says the regulation is not only unconstitutional and discriminatory, it also discourages foreign investments. Bolt is keeping mute.
For local ride-hailing companies, however, the regulation couldn’t have come at a better time.
Little, for example, has taken the opportunity to announce itself and its 15% commission offer. CEO Kamal Budhabhatti has stated that his company is fine with the regulation as it creates fair ground for local startups that can’t offer incentives like discounts because they already charge low-commission fees.
Ghana
Meanwhile in Ghana, after a long battle, Uber recently announced it has reduced commissions to 20%, while Bolt still maintains 25% commission to the disadvantage of drivers.
As a result, lots of hailing-taxi drivers now keep their Uber apps active more than they do Bolt, a phenomenon that used to be the other way round.
What even kills the drivers is that when Uber and Bolt give riders discounts without the consent of the drivers, they still charge their commissions on what is left for the driver.
Moreover, Yango is also taking advantage of the situation to make a headway in the market by offering riders cheaper rates and drivers higher earnings.
In all this, Ghanaian regulators are sitting by and doing nothing to protect the interest of the drivers like their counterparts elsewhere are doing.
Also Read: Uber reduces controversial 25% service fee to 20%
