Taxi hailing service Uber has announced a 35% discount for users of uberX in Nairobi. This comes barely a month after the launch of Safaricom’s Little Cab and the Estonian hailing taxi app Taxify.
The launch of Little Cab came in the wake of EasyTaxi's departure, which seemed to indicate just how dominant Uber has become in the Kenyan taxi space.
Little Cab's value proposition was clearly targeted at both drivers and riders. For a rider, Little Cab charges no base fare and charges a minimum fare of Kshs. 270 and a cost of Kshs. 55 per kilometer and Kshs. 4 per minute. As for the drivers, the company only asks for 15 per cent from all its drivers’ earnings.
Taxify's entry was made smoother by the partnership the Estonian company had entered into with the Kenyan Taxi Cab Association, which had opposed to Uber’s entry into the country.
With the hope of retaining current users and attracting more, Uber has made adjustments to its charges and incentives the platform offers drivers. The base fare of Kshs. 100, Kshs. 3 per minute from Kshs. 4, Kshs. 60 per kilometer, and Kshs. 35 for cancellation and a minimum of Kshs. 200 from Kshs. 300.
However, Uber denies that its new fare structures were brought on by the recent entry of new competitors in the market.
“Uber is constantly looking to add value for its riders and provide unique opportunities for its drivers. As such, we do not make any decisions based on the competition” says Nate Anderson, Uber’s General Manager for East Africa.
In the awake of the fare announcement, Uber moved to assure the drivers that their earnings would not be affected in order to forestall any panic over the lower fares. The drivers would receive a bonus for every hour they remain visible online on the app.
“We shall offer Kshs. 150 for 79 peak hours and Kshs. 450 for 69 off peak hours” said Nate Anderson. He further added that the new changes will see demand for rides from new and existing riders meaning more earnings for the riders.
To protect their interests, drivers on both Uber and Little Cab have formed the Kenya Taxi Digital Association. The association held its first meeting yesterday, and was formed to promote the interests of drivers who use mobile apps to find customers.
With the independence Uber offers its partner drivers to sign up with other on demand platforms; it leaves many questions unanswered considering other apps have come to havoc the comfort Uber was enjoying. The recent rumors of decline in the service’s demand peddled around could be one of the reasons for this decision. Anderson however has come out to say that it is a data driven decision that determines which times its drivers can complete the most rides and monitor their earnings.
It should be noted the similar move was made in Lagos and driver partners there saw an increase in demand and the same is expected to be replicated within Nairobi. The price reduction however will only be limited to Nairobi while Mombasa and Thika will not be included.