Ride-hailing companies in Kenya have expressed concerns over a government plan to introduce minimum compensation for drivers, warning that it could lead to higher costs for commuters and reduced demand for their services. The companies, including Uber and Bolt, argue that regulation should focus on safety, quality of service, and protecting both drivers and passengers, rather than setting prices in a market where fares naturally fluctuate based on supply and demand.
Representatives from Bolt and Uber made these remarks during a forum on the future of smart regulation in Kenya's ride-hailing sector, organized by the Institute of Economic Affairs (IEA-Kenya) at the Serena Hotel in Nairobi. Dimmy Kanyankole, Senior General Manager for East Africa at Bolt, noted that the industry has made significant strides in improving fare transparency, allowing drivers to view pick-up locations, drop-off destinations, and gross fares before accepting any trip.
Kanyankole emphasized that government intervention in pricing could ultimately harm both commuters and drivers, stating that riders will pay what they can afford and drivers will only accept what makes business sense to them. He argued that the market should freely regulate prices, rather than the government. Uber's General Manager and Head of East Africa, Imran Manji, echoed these sentiments, stating that pricing is not the role of government and that imposing price floors could stifle innovation and complicate the introduction of new products.
Manji warned that the proposed regulatory shifts could trigger a 35 percent spike in minimum fares, drastically altering how both drivers and commuters interact with the platforms. He cautioned that drivers might start rejecting shorter trips, while cost-conscious passengers seek cheaper transport alternatives. This, he argued, could lead to an industry where passengers want trips that drivers will not want to take, and vice versa.
State officials, however, argue that the proposed regulatory framework seeks to address structural weaknesses within the industry and guarantee sustainable earnings for gig workers. Paul King'ori, Director of Road and Rail Transport at the State Department for Transport, characterized the current ride-hailing market as disorganized and argued that it requires a policy framework that encourages structured self-regulation.
The government is considering a model similar to the public service vehicle (PSV) sector, where operators organize into Sacco structures regulated by the National Transport and Safety Authority (NTSA). King'ori revealed that the Ministry of Roads and Transport has engaged a consultant to draft a comprehensive National Taxi Policy, which will guide the government on appropriate price regulation mechanisms.
Daniel Manga, Chairman of the E-Hailers Transport Umbrella Association, representing gig workers, clarified that drivers are not simply demanding higher fares but rather a fair and transparent system. He urged regulators to establish clear guidelines on fare calculations and platform suspension protocols, and called for enforced operational standards across the industry, including mandatory vehicle roadworthiness.
Key points
- Ride-hailing firms warn that government price controls could increase costs by 35%.
- Government argues that regulation is needed to guarantee sustainable earnings for gig workers.
- Drivers demand a fair and transparent system, including clear guidelines on fare calculations and platform suspension protocols.
