Transport PS urges Uber to adjust pricing model in standoff with drivers

Corporate News

Transport Principal Secretary Irungu Nyakera. PHOTO | FILE  

By ANNIE NJANJA

More by this Author

By EDWIN MUTAI

More by this Author

Summary

• Uber drivers have complained that the drastic fares reduction had left them unable to service their loans as increase in fuel and other operating costs slashed their profit margins.
• The taxi operators say the price cut that came in effect in July last year and the 25 per cent commission that Uber takes from their total earnings are not sustainable.
• Despite the government’s effort to end the dispute between Uber and its driers, members of DTAK are planning to hold another demonstration on Thursday to pile more pressure for fares increase.

Transport Principal Secretary Irungu Nyakera wants online taxi-hailing firm Uber to adjust its pricing model to take into account changes in economic conditions to address the current standoff with its drivers.

“The State Department of Transport takes this opportunity to urge Uber to critically audit its pricing mechanisms to address any current or future challenges posed by operating in a fluid environment where economic drivers change often,” said Mr Nyakera in a statement that appeared to throw weight behind Uber drivers’ agitation for reversal of a 35 per cent price cut effected last year.

Uber drivers have complained that the drastic fares reduction had left them unable to service their loans as increase in fuel and other operating costs slashed their profit margins.

Mr Nyakera’s statement follows last Thursday’s petition by members of the Digital Taxi Association of Kenya (DTAK) where they urged the government to come-up with a fare determination structure that sets the minimum cost of journeys to various city estates.

The taxi operators say the price cut that came in effect in July last year and the 25 per cent commission that Uber takes from their total earnings are not sustainable.

The Transport PS, Presidential Delivery Unit, Competition Authority of Kenya, National Transport and Safety Authority and Automotive Association of Kenya met with representatives of DTAK regarding the issues that were raised last week.

Despite the government’s effort to end the dispute between Uber and its driers, members of DTAK are planning to hold another demonstration on Thursday to pile more pressure for fares increase.

The taxi operators on Mondday also met a key parliamentary committee, which they told Uber was engaging in “unfair” business practices.

At a session to consider a public petition filed by the Kenya Taxi Cab Association, an aged driver broke down in tears after asking the National Assembly’s Transport and Public Works committee to urgently intervene and save them from exploitation.

“This industry is very exploitative to the Kenyan worker. Requirements by Uber for a vehicle to operate are very expensive. They punish drivers for switching off applications.

“Foreign taxi hailing firms are subjecting our people to servitude and are reaping from us. We are asking you to regulate this big exploitative industry that is unregulated,” DTAK lawyer Akuro Aukot told MPs.

Mr Aukot proposed that the committee come up with a fare determination structure that ensures costs are properly allocated to the rider per trip basis to ensure the driver/partner is not left to bear all associated cost at the end leaving him without a livelihood.