The launch of Safaricom’s Little Cabs seems to have jolted Uber Kenya to take a second look at its prices. The taxi-hailing company has announced a whooping 35% reduction of its prices.
Or is it truly the fact that the company wants to get more business for its partners? Uber says that its has learnt, after years of experience of running this business, that price cuts boost demand so more people request more rides with Uber leading to the drivers earning more money.
As at the last count, there are as many as twelve taxi-hailing cab companies in Kenya and Uber is already the cheapest.
Nate Anderson, Uber’s General Manager in Kenya, explains, “We are committed to making Uber the most affordable and safest option to move around Nairobi. Our experience shows us we can make that happen while making Uber the best way for drivers to earn. This also means riders can ditch their car keys and travel with Uber more often. For some it will make Uber cheaper than owning a car. This means fewer cars on the road, less traffic, and fewer issues trying to find parking.”
Maybe truly it wants its drivers to benefit more from its relationship and I guess at the same time, wipe out competition as it is the biggest incumbent with deep pockets.
Old fares vs New fares
- Old uberX fares: KES 100 base, KES 60 per KM, KES 4 per minute, KES 300 minimum, KES 200 cancellation
- New uberX fares after Price Cut: KES 100 base, KES 35 per KM, KES 3 per minute, KES 200 minimum, KES 200 cancellation
In helping its drivers, the company has gone a step further by partnering with Total to provide some great deals on fuel. This partnership allows Nairobi driver-partners to receive a great discount off every litre of fuel and as an added extra they can get a power wash for KES200.
“We believe these changes will help, but while the city adjusts to the new prices, we are putting in place minimum payment guarantees for drivers to ensure they don’t lose out. And if the amount they make on the road isn’t what we expect, we’ll reassess this price change,” says Nate Anderson.
It would seem that Kenya is a very important market for Uber and it aims to keep all pretenders away.
