TOUGH TIMES

High fuel prices rubs salt to digital taxi operators wounds

The driver community has issued a 14 day ultimatum to have all applications in Kenya jointly address together with the driver community

In Summary
  • Digital Transport Forum, Secretary General, Wycliffe Alutalala said the sector was calling upon stakeholders to prepare a fair business model that will reap fair industry earnings.
  • The online drivers community is concerned at whether the government through various stakeholders are keen on passing the Draft NTSA TNC Rules 2020.
Bolt taxis are among the digital public transport services in which it's officials say the services are at a deteriorating state due to reduced fare prices amidst fuel price increase affecting drivers and car owners alike on March 15, 2021
Bolt taxis are among the digital public transport services in which it's officials say the services are at a deteriorating state due to reduced fare prices amidst fuel price increase affecting drivers and car owners alike on March 15, 2021
Image: CHARLENE MALWA

High fuel prices have worsened the already tough economic environment for digital taxi operators, already reeling from low business occasioned by the Covid-19 pandemic.

“The increase in cost of fuel should not only hurt us drivers, as in the past we have noted when the price increases commissions still remains the same and cost of the trip also remains the same or even goes lower,” the Digital Transport Forum, Secretary General, Wycliffe Alutalala.

He said stakeholders should prepare a fair business model that will ensure all reap fair industry earnings.

The prices of Super petrol, diesel and kerosene increased by Sh7.63 per litre, Sh5.75 per litre and Sh5.41 per litre respectively.

A litre of petrol will now cost Sh122.81 in Nairobi, up from Sh115.18 it has retailed at since February 15 while diesel will retail at Sh107.66 per litre up from Sh101.91.

The association called for the conclusion and passage of the draft NTSA TNC Rules 2020 meant to improve operations in the sector amid the Covid-19 pandemic.

In the regulations , they recommend that no digital hailing service provider shall charge a commission of more than 15 per cent per trip.

Uber charges 25 per cent , Bolt 20 per cent while Little Cab charges 17 per cent.

“The drivers and partners community’s doubt whether these rules shall sail through gazettment,” said Alutalala.

He said the increase in fuel cost was accompanied cheaper options  by Little, Uber and Bolt leading to low earnings.

Uber introduced Uber save priced at Sh100 per trip , Bolt has been having Bolt lite with an average trip cost of Sh180 while Little Cab has introduced the most recent Little Economy with an average trip cost of Sh200.

The Uber Chap Chap service exclusively uses the 800cc Suzuki Alto with a consumption rate of 25 kilometres per litre but the drivers still complain that the earnings are low.

According to Little, they had to introduce the segment as they were losing most of their corporate customers to their rivals based on their fares.

“The competition on who can offer the cheapest rides is really not good for us, since as prices go up in all sectors we are the only ones who remain with low earnings,” said Alutalala.

Last year, due to the pandemic, dozens of their vehicles were auctioned over non-payment of loans and many drivers quit the business.

One of the car owners who opted not to be named complained that the low earnings are what have majorly caused them to be unable to pay their loans.

“If you get a driver bringing you Sh6,000 in a week thats Sh24,000 a month, this is very low for us as partners as the cheapest car you can get on loan will require you to pay Sh30,000 per month,” she said

The drivers and partners now want the applications to jointly arrive at interim solutions for regulating the industry through standard Memorandum of Understanding for the bare minimum before conclusion and gazettment of the NTSA Draft TNC( transport Network Rules) 2020.