Kenyan taxi drivers seek a fare deal as competition drives business

By Sylvia Chebet

Picture this. You are stepping out of the airport, rail station or bus terminus at a new destination, and what's the first thing you invariably do? More often than not, the act of hailing a taxi is a traveller's first interaction with the local environment.

The fare, usually a function of distance, duration and economic variables unique to each place, is the bedrock of the contract between driver and passenger for the journey both will make.

In Kenya, where the recent anti-tax agitation has roiled an already troubled economy, taxi drivers are in a dilemma.

Charge higher fares and they fall foul of their customers and ride-hailing firms. Charge as usual and they continue to bleed.

Stiff competition between local companies and ride-hailing firms Uber and Bolt has led to undercutting fares to the extent that it no longer makes economic sense, according to the harried drivers.

"It's like fetching water in a leaking bucket," taxi operator Samson (name changed) tells TRT Afrika. "We are living hand to mouth."

This situation is unsustainable for drivers servicing loans, providing food, and paying for education and healthcare.

A female driver says she has nothing left after setting aside 2,000 Kenyan shillings (US $15) for her car loan .

"I have children in school and rent to pay," she says. "You operate on a base fare of Ksh 200, and 12 hours later, you still haven't earned enough to repay the car loan and buy fuel. Things are not working out, and we have no other way," she explains, alluding to the incremental charges app-cab drivers have been adding to the standard fares.

Counting the costs

Kenya is one of the major markets for the ride-hailing companies. The country's population is growing, but car ownership remains low, which is a perfect set-up for such a business.

The companies receive an avalanche of ride requests every hour and have the upper hand over their subscribed drivers, who must comply with the app's pricing levels.

For their business to make economic sense, the drivers propose an increase in the base fare from about Ksh 150 to 200 for a small car carrying a maximum of three passengers and up to 300 shillings for cabs categorised as XL.

On other occasions, the drivers add half the total amount charged to the fee, meaning they would charge Ksh 300 for a ride worth Ksh 200.

"When you are pushed, you push the next person," says one taxi driver. Some passengers give in and pay higher fares. Others don't, leaving the drivers with little option but to accept the lower rate.

For one, drivers have to account for the fuel covering the distance between them and the customer, which sometimes can be unreasonably long or delayed when traffic is bumper to bumper.

"If you get about five requests which force you to drive a distance of 10km to pick up a client, and maybe the consumption rate of the car is about Ksh 20/km, you will use Ksh 200 ($1.55) per trip.

Cumulatively, you will have spent Ksh 1,000 ($7.75) to get customers," says a driver.

With the cost before the ride falling squarely on the driver, they are at a further disadvantage if they run into traffic with their customers on board – a daily occurrence during rush hours.

The app automatically deducts a percentage from the customer’s payment. Hence, a 20% deduction from such a trip would automatically leave the driver with a dent in their pocket.

"Imagine you are already minus 80 shillings. What kind of business is that?" says Samson.

Tough conditions

A few drivers take loans to buy cars, while the rest hire vehicles. At the close of business every day, they are expected to remit a pre-agreed amount to the car owner after deducting costs relating to fuel and repairs.

Most drivers remit a minimum of Ksh 2,000 daily, depending on the vehicle size.

"Usually, the car would have tracking gadgets, meaning that with every move you make, the owner knows you are making money. So, they expect money because the car has been moving," explains Samson.

There are other challenges, too, such as arbitrary suspensions, victimisation and ill-treatment by the ride-hailing companies, and harassment from some customers.

"Once they suspend you, it escalates into a National Transport and Safety Authority issue. The chances of renewing a Public Service Vehicle licence become very minimal. So, you are pushed out of the market," rues Samson.

Silver lining

A local ride-hailing company in Kenya, Little Cab, is trying to ensure the chips aren't always loaded against drivers.

“They even make calls to drivers. Likewise, you can call them, email or chat with them whenever you wish to raise an issue," says Samson.

Another local firm, Faras Cabs, is taking steps to protect its drivers and customers simultaneously.

"We have brought about a few changes in favour of the drivers while tackling a few issues to cushion our clients. The first thing we have done is to raise our minimum fare from Ksh 200 ($1.55) to 240 ($1.68)," Osman Abdi, Faras Cabs' chief commercial officer, says.

Taxi drivers are waiting to see if the more established ride-hailing companies with an international footprint will follow suit.