Taxi App Price War Infuriates African Drivers
This week, drivers from a host of taxi apps in Kenya, including Uber and Taxify but also the likes of Little and Mondo Ride, took to the streets in protest, while getting hold of a taxi became a real challenge across the city.
Drivers spoken to by this reporter indicated their anger at how little money they were getting for their work, with even strikebreakers saying they agreed with the protests but just could not afford to switch their apps off.
Digital Taxi Forum chairman David Muteru said the increasingly low rates charged by taxi apps in Kenya were squeezing the pay of drivers, who he said are now working for as low as $0.20 per kilometre, far below the introduction price of $0.60.
It is not the first time this has happened, with a strike over pay also taking place last September. Strikes and protests also took place in Johannesburg last month.
Uber and Taxify had been slashing their rates, with Little following suit. Uber slightly raised prices again in March in response to driver pressure, but the price war is likely to drag on as the rivalry increases.
Taxi app price war puts pressure on drivers
This is good news for the consumer, but not for drivers, who are asking the companies to either charge riders more or cut their percentage of total earnings. In South Africa the situation is exacerbated by rising fuel prices.
Drivers have complained that their opinions are not being listened to, but both Uber and Taxify did immediately respond when asked for a comment on the strikes in Kenya. Both took a slightly different approach, however, and neither could confirm that they would be increasing prices or cutting their own commissions in order to ease the burden on drivers.
“We respect drivers as valuable partners with a voice and a choice and we want drivers to feel they can talk to us about their individual concerns at any time. Drivers have a number of channels available to engage with Uber including daily office hours, 24/7 support and regular partner roundtables,” said Uber spokesperson Samantha Allenberg.
She said Uber was constantly monitoring fares and examining price sensitivities to ensure fares are correctly priced, so that riders continue to take trips and drivers have access to more fare-paying passengers.
This suggests Uber will not be making any immediate adjustments in the wake of the events in Kenya and South Africa, with Allenberg in fact keen to make it clear that any driver that had overstepped the mark while protesting in Kenya would face the consequences.
Uber is currently requesting for Nairobi authorities to conduct a full and thorough investigation into rider intimidation that has allegedly been occurring in Nairobi, in order to confirm if any of the drivers involved are using its app. Allenberg said any Uber driver found to be involved would lose access to the app immediately.
Taxify chose to take a slightly more placatory tone towards protesting and striking drivers, with general manager for East Africa Shivachi Muleji saying the company was aware of the recent driver app switch-off initiative and the desire for its driver-partners to be heard.
He said the company was taking this desire seriously, and believed that a happy driver meant a happy rider.
“Taxify is a driver-first business and truly believes that happy driver-partners means a better quality service for riders. We have continually guarded driver-partner earnings by taking lower commissions and have supplemented their earnings with bonuses,” Muleji said.
According to him, driver-partners on the Taxify platform make more than on any other platform in the industry, with earnings per trip on average 14 per cent higher on the Standard category and 40 per cent higher on the Taxify Go category.
“Taxify is committed to treating its driver-partners with respect and has an open door policy. We encourage all driver-partners on the Taxify platform to continue to give us feedback and share any concerns they might have,” he said.
This did not stop Taxify drivers joining those from other apps to strike this week, and in previous cases, and it remains to be seen if any action will be taken by any of the ride-hailing companies.
What is clear is that the ongoing price war, and the fight to take control of the valuable taxi app market in Africa, is having serious, unforeseen consequences that could yet damage the likes of Uber and Taxify.
Tom Jackson is co-founder of Disrupt Africa, a news and research company focused on the African tech startup ecosystem.