Uber Protests Proposed 15 Percent Commission Cap on Trips

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Uber’s arm in Kenya is in opposition to a government draft regulation proposing a 15 percent commission cap on trips on grounds that it is restrictive.

“As ride hailing firms we are all about policies that support innovation and businesses growth, however such a law will not be progressive for the industry,” said country manager Richard Njao.

Taxi hailing apps such as Uber, Bolt and Little cab have become popular connecting customers to rides in most of the major Kenyan towns.

Read: Uber Launches Intercity Bus Hailing Service In Egypt

A lot more people have also taken up investment in the online taxi service with KNBS data showing an increase in the number of Public Service Vehicle (PSV) licenses issued last year.

“This was mainly due to increased licences issued to PSV taxis using mobile apps and registered PSV Saccos and companies in 2019,” said KNBS.

However, the new regulation could result in a decline in the number of people signing up as service providers due to the reduction in earnings.

Read: Uber Launches Digital Wallet in African Countries

Ride hailing platforms and blue collar matchmaking platforms are projected to grow by at least 33 percent in the next five years to Sh345 million the Kenya Gig economy. The ride hailing sector currently has a 37 percent average annual growth.

“As a country, we are still trying to better understand the tech industry,even from a tax standpoint, and it is important that we explore ways of growing the industry, with progressive regulations,” said Njao.

“By not over-regulating the industry, policy makers will be able to modernise existing regulations, emanating in tens of thousands of new jobs and business opportunities being created.”

Read also: Uber Records Sh194 Billion Loss In The Last Quarter

Njao also said that the government could help to drive growth and driver earnings through other avenues.

‘The government could provide ride hailing drivers with flexible pension and health schemes through NSSF and NHIF and this could be a win win.”

The industry was also hit hard by the Covid-19 pandemic due to the travel restrictions and curfews imposed in major towns across the country.

Read also: Uber Quietly Introduces “Connect” Delivery Service In Kenya

Uber Kenya recorded a 70 percent drop in revenue between April and July, and only started stabilizing when the restrictins were eased.

Despite the pandemic, the company launched “Uber Connect” to help people deliver parcels and increased activity on its Uber Eats app.

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Written by Vanessa Murrey

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