Taxi Drivers in Kenya Facing Stiff Competition from Uber

By Soko Directory Team / Published February 1, 2016 | 8:53 am



Uber is a Taxi Firm, Court Rules Not a Digital Service

In January 2015, Uber, an American taxi service launched its services in Nairobi Kenya venturing into a business that was already experiencing stiff competition.

Many people saw the entrance of Uber into the Kenyan market as a relief for the company was known for its cheap prices that would be more affordable to most Kenyans. When the company launched its operations in Kenya, it only accepted cards as a form of payment, something that many Kenyans were not used to.

Getting little returns from the card payment system forced the company to review its payment policy and started accepting cash from their customers. This move, according to financial analysts tripled the income of the company as many Kenyans subscribed to its services.

The taxi environment within Nairobi was disrupted by this move as the indigenous taxi operators lost their customers to the new and cheaper entrant, Uber. Most travelers like using Uber for various reasons among them being that their services are affordable and that they are flexible since they have an app that enables customers to reach them faster unlike other taxis.

For instance, from Westlands to Nairobi’s Central Business District, using Uber, a customer pays amounts ranging from 300 shillings while using other taxi services forces one to pay a minimum of between 650 -700 shillings. This has rubbed Kenyan taxi drivers the wrong way and reports have now emerged that some independent taxi drivers are physically attacking and even plotting to kill their counterparts operating through Uber.

According to some Uber drivers as well as the management, Taxi drivers in Nairobi are posing as Uber clients and upon being picked, they’ll attack the unsuspecting Uber driver with their colleagues.

The taxi drivers last Thursday warned of an impending attack on Uber partners, something that prompted the US tech firm that owns the service to alert its Kenyan associates to move with care.

“We have received reports of isolated intimidation and harassment of our partner-drivers at the Oval — a commercial building complex — in Westlands, Nairobi” Uber said in a message sent to partner-drivers.

“Please be alert and aware in this area by concealing your Uber device and ensuring that your pick-ups and drop-offs take place in public, well-lit areas,” said Samantha Allenberg, the spokesperson for Uber Africa, adding that the company was working with the relevant stakeholders in Nairobi to ensure the negative experience is not repeated. There has even emerged a WhatsApp group created by indigineous drivers where they plot to kill their Uber counterparts.

Implications of war on Uber Taxis

Uber is a foreign owned company and if continued violence towards it’s partners in Kenya is not checked, the investor might consider withdrawal from the Kenyan market.

This is also going to paint Kenya as a country that is hostile for foreigners to operate in as it implies that Kenyan businessmen do not like competition and that they are ready to commit illegal actions in order to root out any competition.

People who have been employed as drivers at Uber are Kenyans and if the company decided to close shop then these people will lose their jobs.

The company is also a source of revenue which stands to be lost if the hostility its facing from local taxi drivers persists.


Article by Juma Fred.

 




About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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