Uber has announced a price increase across all its products in the country. This decision comes after months of protests from drivers and follows recent price adjustments by several other ride-hailing companies.
The move is set to address driver concerns while potentially reshaping the competitive dynamics of the market.
The Price Hike: What We Know
Imran Manji, Uber’s Head of East Africa, revealed on Monday that the company has completed its analysis and implemented price increases across all its products.
While specific details about the pricing changes for different ride options remain undisclosed, Uber did confirm a 10% increase in minimum fares. For instance, the minimum fare for the popular Uber Chap Chap service has risen from KES 200 to KES 220.
Uber’s pricing mechanism is a complex algorithm that considers multiple factors. These include the minimum fare, starting fare, distance-based fare per kilometre, and time-based fare per minute. This intricate system aims to balance fair compensation for drivers with competitive pricing for passengers.
Driver Protests and Passenger Complaints
The price adjustment comes in the wake of growing tensions between Uber and its driver partners. In recent weeks, drivers had taken matters into their own hands, creating and displaying their own fare guides in their vehicles.
This resulted in passengers complaining about being charged more than the app-generated fare.
Manji addressed these issues, stating, “We hope that this behavior of price negotiation will now stop.” He encouraged passengers to report any discrepancies between the app-displayed fare and driver-requested amounts directly to Uber.
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Uber faces the challenge of satisfying its 20,000+ drivers in Kenya while maintaining affordability for its price-sensitive customer base. The company has been investing heavily in promotions to encourage more trips, often resulting in passengers paying less than the average fare.
Lorene Onduru, Uber’s head of communications in Kenya, acknowledged an increase in customer complaints about drivers requesting additional money for rides. However, specific figures were not disclosed.
“We are not able to provide that figure. But we have channels through the app where you can complain about a specific trip, then we can start investigations and take action. We have been seeing reports coming in and we are taking action,” said Ms Lorene Onduru, Uber’s head of communications in Kenya.
Market Impact and Future Outlook
This price adjustment is likely to have far-reaching effects on Kenya’s ride-hailing industry. As Uber aligns its pricing more closely with driver expectations, it may prompt other companies to reassess their own fare structures.
The key question remains: how will passengers respond to these changes?
Manji expressed optimism about the new pricing structure, stating, “Overall, where we think we’ve settled is a good balance between an increase for the drivers while still being affordable for passengers.”
As the dust settles on this latest development, all eyes will be on Uber to see if this price increase succeeds in appeasing drivers without alienating passengers.
The coming weeks and months will reveal whether this move strengthens Uber’s position in Kenya’s competitive ride-hailing market or opens the door for rivals to gain ground.
