A proposed minimum fare for ride-hailing services could leave drivers with fewer passengers and lower earnings, Uber, Bolt and Faras have told Parliament as they seek to keep pricing determined by market forces.
The three companies opposed plans to introduce mandatory minimum charges, saying a rise in fares could make some passengers reduce their use of digital taxi services. They argued that fewer bookings would mean drivers complete fewer trips, which could affect the income they make from the platforms.
The firms made the case in submissions to the National Assembly Departmental Committee on Communication, Information and Innovation, which is reviewing proposed changes to the regulation of ride-hailing services.
The companies said drivers’ earnings cannot be looked at through the price of an individual trip alone. They said the amount a driver makes is affected by the number of trips completed, the level of passenger demand, vehicle use and the costs involved in operating the vehicle.
“If fares rise and passenger demand falls, drivers may complete fewer trips and ultimately earn less,” the companies said in a joint memorandum.
They asked MPs to allow platforms to continue setting fares according to market conditions rather than introducing a compulsory floor.
According to the firms, increasing the cost of rides could push some passengers to other transport options, including services they described as less reliable. A decline in passenger bookings would then reduce the amount of business available to drivers.
The companies also challenged the existing 18 per cent limit on service fees charged by ride-hailing platforms.
They want the ceiling removed, saying it restricts the money platforms can use to support different services and make investments in the industry.
Among the areas they listed are passenger promotions, incentives for drivers, safety technology, emergency response systems, customer support and development of new digital products.
“Government would effectively set the minimum fare a passenger pays while simultaneously limiting the maximum revenue a platform can receive for facilitating the trip,” the companies said.
The firms said the 18 per cent limit applied in Kenya is lower than the global average of 25 per cent.
They warned that keeping the ceiling could make it harder for platforms to put more money into their operations and develop new services in the local market.
Another request made by the companies was a longer period for operating licences.
Instead of renewing licences every year, Uber, Bolt and Faras proposed periods of three to five years.
They said longer licences would give businesses more certainty and reduce concerns among drivers who rely on ride-hailing as a source of income.
MPs, however, raised questions about whether a five-year licence would give regulators enough room to respond to changes in technology and the industry.
The committee suggested that a period between the current annual renewal system and the proposed five-year term could be considered.
The firms also raised concerns about regulations imposed by both national and county governments.
They said businesses could face difficulties where different authorities introduce requirements that overlap, particularly if the transport network company framework is expanded to include goods transport and two- and three-wheeled motorcycles.
“Businesses should not be left to navigate different and sometimes overlapping regulatory requirements without a clear coordination mechanism,” Kiarie said.
The companies also gave their position on the status of drivers working through their platforms.
They maintained that drivers are independent contractors who have control over how they use the services.
According to the firms, drivers decide when they want to work, where they want to operate, which trips to accept and whether to work through more than one competing platform.
They nevertheless supported stronger procedures for dealing with drivers who face complaints or allegations.
The companies proposed that temporary suspension should be treated differently from permanent deactivation, especially where a suspension is linked to safety concerns.
They also said drivers should be given a reasonable opportunity to respond to allegations before a permanent decision is made.
Committee vice chair Alfah Miruka pressed the firms on the amount drivers are left with after meeting the expenses that come with operating a vehicle.
He said Parliament needed to look beyond the money generated from trips and establish what drivers actually receive after paying for fuel, repairs, insurance and other costs.
“We need to establish what the driver takes home after meeting all these costs. The welfare of drivers is equally significant,” Miruka said.
Nandi Hills MP Bernard Kitur also called for drivers to be brought into the discussion before Parliament settles on new rules.
“Before Parliament decides on minimum fares or service fees, we should hear directly from the people who drive these vehicles every day,” Kitur said.
The companies also told MPs that technology has played an important role in improving safety for people using ride-hailing services.
They pointed to systems used to confirm drivers and vehicles, GPS monitoring, emergency response tools and digital feedback from passengers.
An Uber official said ratings given by passengers help platforms spot service-related concerns and identify areas that need attention.
The firms added that customers can also seek assistance through support teams and physical offices.
The committee further questioned the companies about artificial intelligence and other new technologies that could change how ride-hailing services operate.
The firms said their technical teams were interested in adopting new developments as technology advances.
Kiarie said any rules adopted by Parliament must take into account the needs of passengers, drivers and businesses while leaving room for new ideas and technology.
“We must ensure that whatever regulatory framework we adopt protects consumers, supports drivers, and at the same time allows innovation to thrive,” Kiarie said.
He also called on ride-hailing companies to create more opportunities for women, Kenyan developers and local innovators.
Kiarie cited M-Pesa as an example of a technology product that has grown from a Kenyan and African development story.
He also praised Faras for taking part in the local ride-hailing market and urged the company to ensure its brand and services appeal to Kenyans from different regions.
Uber, Bolt and Faras further asked Parliament to ensure any new rules are proportionate, based on evidence and neutral towards different technologies.
They warned that heavy regulation could make the sector less attractive to investors and limit the development of new services.
The companies proposed that an independent Regulatory Impact Assessment be carried out before major changes to pricing are introduced.
They said ride-hailing has created tens of thousands of flexible earning opportunities while also supporting businesses involved in vehicle financing, insurance, fuel, maintenance and digital payments.
The firms added that the sector also contributes to tourism and hospitality by providing transport services to people moving around the country.
They urged MPs to develop rules that protect passengers and drivers without making ride-hailing services too expensive or limiting competition.
The committee directed the companies to submit revised memoranda as it continues its review.
It will also hear from drivers and other stakeholders before making recommendations on minimum fares, service fees, operating licences and other rules affecting the ride-hailing industry.