CAB FARES RISE FOR ‘LITTLE‘ USERS BUT CEO TAKES THE TROUBLE TO EXPLAIN THE REASONS
(Posted 19th July 2018)
Little’s CEO Kamal Budhabhatti went to some length to explain the tariff increase now effective, following nearly two weeks of strike action by drivers working for app based cab hailing operators like UBER and Taxify.
The letter written by the CEO caused prompt attention for its frank and candid tone and the consideration shown to the company’s drivers, while for weekends still offering reduced fares, at the expense of the company but not the drivers.
After a deep thought, we’re rolling out a minor increase adjustment to our fares at Little, from 30KES to 35KES in Nairobi starting today. I know this is not the best of the news for you. But, I would like to share some of my sentiments and rational behind this decision.
Little is Kenyan, I am a Kenyan. I know for a fact that life in our city is not that easy. I want you to see this decision from the side of our drivers. For him to take you around safely, he will have to fuel his car, keep it clean, ensure that car is roadworthy with necessary documents and Insurances. On an average he needs a minimum of about 3,000 KES a day to run his business. Anything above 3,000 KES is his profit. Let us go by the bare minimum he makes a profit of 2,000 KES per day. This means that he needs to make a a minimum of 5,000 KES a day. Mind well with 5,000 KES a day, he is barely making ends meet, after paying the cost of running and maintaining the vehicle.
Let’s do some reverse engineering. With our competitors price strategy and price wars, they pay as low as 29 KES per KM. They take between 15% and 25% commissions. That means he is basically earning about 24 KES a KM. So, for him to earn 5,000 KES a day, he needs to do about 20 trips. On an average if each ride is for half an hour, he needs to be driving for about 10 hours. This is the Trip time, the time when he is not on trip and taking rounds looking for a Trip is added. Based on our data, a driver must drive over 12 hours on average every day to be profitable at the rates that other apps are giving him. I bet with this load, his family life goes for a toss.
I run Little, and as much as I love my rides, and want to give them the most economical mobility, I feel it’s just not fair for to our drivers. With these low earning, you must have noticed that Drivers from other apps have started giving you bad experience. Some of them even end up having accidents because of working overtime. Some of them involve in cheating riders. Not sure if you read in the recent news on drivers conning riders by overcharging.
As a Kenyan, I want to be sure that I don’t take our fellow drivers for granted. I humbly request you, our Riders to accept this minor price adjustment, which will go a long way in bridging the gap towards a better driver welfare.
Of late I have been have been going around various places of Nairobi and meeting with thousand and thousand of drivers. I have spent time to hear them; I have spent time to be part of their life, to share their joy and sorrow. I have their commitment that they would give you premium experience when you take Little.
And ye, so that I don’t spoil your weekends, our weekend offers to bring you discounted rides at 25 KES on Friday, Saturday and Sunday still remains. These discounts come from our pocket, as Drivers would earn their full income.
While this increase takes effect, Little still remains the most reliable hailing platform in Kenya.
God Bless Kenya!
Kamal Budhabhatti | Chief Executive Officer, Little.
Hats off to Kamal for his decision and his eloquent explanation, something his main competitor UBER still has to do but probably will not due to their institutional corporate arrogance.