Price war erupts as UBER slashes taxi fares


(Posted 27th July 2016)

Transport charges by UBER in Kenya will as of midnight tonight come down from 60 Kenya Shillings a kilometre to just 35 Kenya Shillings per kilometre while the charges per minute are being reduced by 25 percent to 3 Kenya Shillings.
The base fare of Kenya Shillings 100 however remains unchanged though short rides will now cost 200 instead of 300 Kenya Shillings.
While UBER spokesperson Samantha Allenberg in a transparent attempt to put a brave face to the move spoke of being passionate about Nairobi is the simple truth of the slashed fares the sudden sharp rise in competition.
A Safaricom backed company – Safaricom being Kenya’s communications and mobile money giant – by the name of Little Cabs has entered the market recently with a big bang and taken significant enough market share out of the previously UBER dominated market, prompting a major fare review and what will no doubt become a major price war. When Gulf based Mondo Ride entered the market a few months ago did they also do so with lower charges. Last week another competitor entered the market, named Teke Taxi, increasing the pressure on fares yet more.
It is understood that in view of the drop in demand for UBER services, as a result of intensified competition, UBER drivers began to become restless and the company was engaged in meetings with drivers to find a way forward. It is also understood that recruitment of new drivers has for the time being been halted to share the existing business with drivers already on the system and not make their life even more difficult by adding yet more.
Other App based cab hailing services are expected to react to the new UBER fares and in turn also either match or further undercut UBER’s latest fares in Nairobi which become effective tomorrow, Thursday, 28th of August.
Beneficiaries are of course the clients of UBER and of rival App based taxi / cab hailing services who will save big as long as the reduced fares remain in the market.