Uber, a ride-hailing firm, adjusts the service fees its riders in Kenya pay for each ride.
In an emailed statement Sunday, Uber announced the receipt of its transport network licence to operate in Kenya from the National Transport and Safety Authority (NTSA), prompting the immediate adjustment of the service fee from 25% to 18%.
“We are committed to Kenya and will continue to find workable solutions that benefit both riders and drivers using the platform and the business,” says Imran Manji, Head of East Africa for Uber.
“Since our launch, Uber has been actively working with regulators to help shape the future of ride-hailing in Kenya. This has been our aim since we launched in Nairobi in 2015, and we have stayed true to that.”
According to Uber, the service fee is the fee drivers pay Uber, which varies from trip to trip. It’s the difference between what a rider pays and what a driver earns on a trip, excluding tips, tolls, certain fees, taxes, and surcharges.*
In September 2022, Uber appealed to Kenya’s decision to cap the commission charged per ride at 18% and evaluate its pricing structure, saying it would dent its earnings and discourage further investment.
Through their law firm, Coulson Harney LLP, “The introduction of 18% as the ceiling for allowable commission has the potential to stifle innovation and reduce the petitioner’s economic feasibility of investing in the market.”
“The Kenya Revenue Authority is presently in the process of finalizing digital service tax regulations as well as VAT regulations that would impose additional taxes of 1.5% and 14% on the petitioner’s (Uber) service fees.
This coupled with the proposed cap in the commission will have a major impact on the petitioner’s revenue from the Kenyan market, which in turn will have an adverse impact on the Kenyan market prioritization for investments,” it added.
However, now Imran says, “We are certainly excited about our future in Kenya. We remain committed to engaging with policymakers, raising the bar on safety, helping drivers grow their businesses, and improving the experience of riders.”
