Government to de-register non-compliant taxi firms, Murkomen warns

Transport CS Kipchumba Murkomen speaking during the launch of YEGO mobility Kenya on May 5, 2023. [Wilberforce Okwiri, Standard]

Digital taxi companies operating in Kenya risk de-registration if they do not operate within new regulations.

Transport Cabinet Secretary Kipchumba Murkomen warned that the government will delist digital taxi-hailing companies that contravene the recently passed regulations.

Murkomen said the Transport Network Companies (Owners, Drivers and Passengers) Regulations, 2022 gazetted in June last year is fully in force.

"We will not hesitate to deregister companies that are compliant," said Murkomen. He said the industry should not operate as if there is no law.

The CS was speaking on Friday during the launch of another digital taxi-hailing company, known as Yego (Yego Mobility).

Murkomen said that operators must not cut corners while operating in the country.

"You are not allowed to use the backdoor with let's say administration charges or booking fees," Murkomen said, in reference to tricks some of the firms use to make more money from motorists whom they have contracts with.

He said that the use of such fees as administration and booking end up denying the motorist their rightful percentage according to the regulations.

"The law exists and now it is now about enforcement," said Murkomen.

The regulations stipulate that the commission paid by the transport network company, in this case, the digital taxi-hailing firm, shall not exceed 18 per cent.

"A transport network agreement shall not include any terms or conditions designed to increase the commission payable by a transport network driver or transport network owner such that it exceeds 18 per cent of the total earnings per trip," reads Part II 9(3) of the regulations.

By adding these other charges, some firms end up taking more than what is owed to them by law.

The regulations also dictate that before a company is registered, it must be tax compliant, registered by the Data Commissioner as a data controller and have a physical office located in Kenya.

These regulations are a culmination of an almost decade push and pull between digital taxi hailing firms and motorists, who have severally gone on strike, in a bid to improve their earnings per trip in the industry that before the law, was largely unregulated.

Yego Mobility Founder & chief executive office Karanvir Singh detailed how the firm is going to do even more for motorists with initiatives like Personal Accident Cover, National Hospital Insurance Fund (NHIF) and a perpetuity returns of 10 per cent for Yego Sacco.

This is in addition to taking a commission of 12 per cent, below the 18 per cent stipulated by law, allowing the driver or vehicle owner to go home with 88 per cent per trip.

Other digital taxi hailing firms whose commissions was as high as above 20 per cent were forced to reduce to 18 per cent upon the regulations. Even so, the 12 per cent commission is poised to be a disrupter in the industry largely dominated by Uber and Bolt.

"This will be the turning point to the history of taxi hailing in Kenya. We believe in not only supporting the government but also the citizens of Kenya," said Mr Singh.

Mr Singh said drivers in the industry have been put under pressure by digital taxi hailing companies who discount fares to a large extent.

As such, a driver who makes Sh5,000 would end up with about Sh350 when all costs like car rental, fuel and commission, that was as high at 25 per cent before the regulations are deducted.

"The lion share goes to the digital taxi hailing company. That is like an electrician charging you every time you switch on the lights yet you are the one who bought all the wires, switches and lamps and they only did the connection," said Singh.

National Transport and Safety Authority (NTSA) Director General George Njau said that even with the regulations in place, there are areas that need to be relooked at in order to better the sector.

"For example, one of the directives we have is to have a national transport database. We need to know what is moving in this country. We talk about Nairobi City County being congested; how many vehicles enter Nairobi County? Who knows?" he said.

Yego Mobility was the first network company licensed by NTSA upon the implementation of the regulations as published in a notice by the authority in April.

Any transport company in operation before the commencement of the regulations was issued with a 90-day period to comply.

The regulations indicated that the application and renewal of licenses by network companies is Sh100,000 annually.

"Any person who contravenes any provision of these Regulations commits an offence and shall be liable on conviction to a fine not exceeding sh20,000 or to imprisonment for a term not exceeding six months or both," the regulations read.