In Nairobi, Kenya’s bustling capital, taxi drivers are facing unprecedented challenges as price wars between ride-hailing companies intensify. For Judith Chepkwony, a veteran driver with eight years of experience, business has never been tougher. Fierce competition between international giants Uber and Bolt and local rivals Little and Faras has driven fares to unsustainable lows, leaving drivers scrambling to make ends meet. The situation has become so dire that many drivers are now setting their own fares, risking penalties from the platforms they work for.
The burden on drivers: rising costs and unpaid loans
Chepkwony’s experience is similar to that of many drivers in Nairobi who are struggling to keep up with the rising cost of living and the loan payments on their vehicles. “Most of us have rented these cars and the cost of living has increased a lot,” Chepkwony explains. To make her business profitable, she often tries to negotiate higher fares with passengers. “If they can’t pay, we cancel and let them find another driver,” she adds, highlighting the difficult decisions drivers have to make on a daily basis.
The ride-sharing platforms’ response: a conflict of interest
But these informal wage negotiations have not gone unnoticed by ride-hailing companies. Uber, in particular, has said that such practices violate its policies and has asked drivers to abide by standard rates set by its algorithm. This is setting the stage for a growing conflict between the automated pricing systems of the global ride-hailing industry and the economic realities facing drivers in one of its largest emerging markets.
Economic pressure: A nation struggles with high costs
Kenya, a country of 50 million people, is under great economic pressure. There are widespread protests against tax increases, rising prices of basic goods and high interest rates. These factors have significantly reduced disposable income, exacerbating the difficulties for ride-hailing drivers. Countries such as Kenya, Nigeria and Tanzania are important markets for Uber in Africa due to their relatively low car ownership rates. However, these markets have proven difficult. Drivers went on strike several times last year over low commissions.
Collective driver response: A new approach to pricing
To counter the unsustainable fares dictated by ride-hailing platforms, drivers in Nairobi have started organizing collectively. Many use walkie-talkie apps like Zello to agree on higher prices among themselves, ensuring customers receive consistent prices regardless of the app they use. In addition, some drivers have created their own fare guides that they display in their vehicles to inform passengers of the fares they are willing to accept. “We first ask the customer where they are going and how much is shown in the app,” says Erick Nyamweya, a driver from Nairobi. “Then we suggest a fare based on our table, which can also be done by quickly multiplying by 1.5. If they agree, we accept the ride. If not, we either negotiate further or refuse.”
Local start-ups: A small victory for drivers
Some progress has been made on addressing drivers’ concerns. Local start-up Faras Cabs recently increased its fares by as much as 20% to meet drivers’ demands, according to Osman Abdi, the company’s chief commercial officer. While this move is a positive one, it underscores the larger problem facing the industry: balancing drivers’ needs with customers’ expectations.
The customer’s perspective: a waste of time and money
For customers, this new reality has introduced a frustrating aspect to what should have been a convenient service. “The negotiations take so long that the purpose of taking a taxi – saving time – is defeated,” laments Lameck Owesi, a regular ride-sharing user in Nairobi. This added inconvenience, along with higher fares, means customers are now paying more money and time.
A complex future for Kenya’s ride-sharing industry
As Kenya’s ride-hailing industry evolves, tensions between drivers and platforms are likely to continue. With economic pressures refusing to let up, drivers are increasingly forced to find ways to make their work profitable, even if it means skirting the rules. Meanwhile, ride-hailing companies must strike the delicate balance of keeping their services affordable for customers while ensuring their drivers can earn a sustainable income. The outcome of this battle will shape the future of ride-hailing in Kenya, and potentially other emerging markets in Africa.
