Competition is not the determining factor in Uber 35% fare reduction

Nairobi has definetly been the city to watch when it comes to online transportation with numerous taxi options like: Mondo Ride, Sendy, Taxify, Mara Moja, and Pewin Cabs not fogetting the recent launch of Safaricom’s Little Cabs, a taxi hailing app in collaboration with Craft Silicon to compete with Uber.

Safaricom Little Cabs users are able to make payment using M-PESA, Debit or Credit Cards, Cash will soon be able to redeem their Bonga Points to make payment as well whereares Uber users make payment using Debit or Credit Cards, Cash.

Nate Anderson, Uber’s GM for East Africa said, “Uber is constantly looking to add value for its riders and provide unique opportunities for its drivers. As such, we do not make any decisions based on the competition.”

In relation with the cost to the rider, Little Cabs charges no base fare but charges a minimum fare of Kshs. 270 and a cost of Kshs. 55 per kilometer and Kshs. 4 per minute. The company will only take 15% off driver earnings compared Uber who will maintain it’s 25% off driver earnings but added few enticements to their rider charges with a 35% fare reduction.

New uberX rates

	Old uberX	New uberX
Base	KES 100	KES 100
Per Minute	KES 4	KES 3
Per KM	KES 60	KES 35
Cancellation	KES 200	KES 200
Minimum	KES 300	KES 200

“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.

To this effect Uber is also providing its driver partners with guarantees during peak and off peak periods to ensure cutting prices don’t hurt drivers.

“We shall offer Kshs. 150 for the 79 peak hours and Kshs. 450 for the 69 off-peak hours”, said Nate Anderson. “We are hoping these new changes will see demand for rides from new and existing riders meaning more earnings for riders”, he added.

Nairobi and Thika are the towns where the price reduction will be implemented as Uber did not specify if this would also happen to Mombasa in the near future.