Uber has raised fares by adding 10 shillings to the minimum fare as a fuel charge to offset recent increases in prices at the pump, following outcry from drivers over lower incomes.
The company has revised its fares effective July 5, raising the minimum fare from Sh150 to Sh160 for the Uber ChapChap option, the low-cost and almost default service for most Kenyans.
The base fare – the price charged before the trip begins – has been increased from 8 shillings to 108 shillings. The rate charged per kilometer was also increased from 25 shillings to 26 shillings. The new fares are likely to be rejected by riders who have been pushing for higher fares to compensate them for the increased cost of doing business.
The rates are expected to act as a fuel surcharge in response to a rise in petrol and diesel prices by Sh9 per liter in June.
The minimum fare for the more expensive Uber X remained unchanged at Sh200, but the company increased the fare per kilometer to Sh39 from Sh38, with the base fare rising from Sh115 to Sh130.
Its main rival, Bolt has yet to revise its prices, but a source has revealed that the company will introduce booking fees as early as next week.
Uber’s review comes after Transport CS James Macharia announced new regulations capping commission charged at 18% per trip.
“We took into account the increase in the cost of living and the increase in the cost of fuel. We remain committed to providing a reliable revenue opportunity for drivers as well as reliable service for passengers,” Uber said when announcing the new pricing structure.
The introduction of the fuel surcharge comes after Uber’s director for East Africa, Mr Imran Manji, said the company was looking to balance raising fares for drivers to cover their costs while keeping the passengers.
Both Uber and Bolt have expressed concerns that riders will reduce the number of passengers they pick up in a month amid biting cost of living and falling disposable incomes.
Uber’s fare increase saw a trip that previously charged 930 shillings cost more at 1,160 shillings. Another trip charged Sh300 increased to Sh40 after the review, indicating a 13-25% increase in cost for the rider.
Along with fuel costs, drivers also complained about the high commissions that ate into their income.
The Uber, Bolt and Little platforms charge 25%, 20% and 15% respectively of the price of the ride, in addition to a 16% value added tax introduced on digital services which are passed on to passengers.
The commission covers promotional discounts to attract passengers, operating costs, on-trip health insurance for the driver and passenger, and support for safety button technology on which passengers or drivers can press if their safety is in danger.
Bolt, formerly Taxify, increased partner commission fees from 15% to 20% in September 2019, while Little’s enterprise service also increased fees to 19% in 2020 due to growing costs of exploitation. The Hava app charges 10%.