Why 60pc of Kenyans would abandon ride-hailing if fares rise

Most Kenyans who use ride-hailing services want fares left to market forces rather than fixed by the government, a new survey by Trends and Insights For Africa (TIFA) Research shows.

This is even as the online taxi industry generated between Sh126 billion and Sh147 billion in the past year.

Only 33 per cent of respondents supported a government proposal to set minimum trip prices while 63 per cent said fares should be determined by the market. Four per cent were unsure.

Awareness of the proposed policy remains low, with only 27 per cent of respondents saying they knew about the fare regulation plan before the survey while 73 per cent said they had no idea it existed.

The debate follows a May 22 directive by President William Ruto, who ordered the Ministry of Transport and the National Transport and Safety Authority (NTSA) to fast-track minimum fare regulations for ride-hailing platforms.

Ruto issued the directive at State House, Mombasa, after consultations with matatu operators and digital taxi drivers amid a fuel price crisis that has squeezed driver earnings.

The proposed rules fall under draft National Transport and Safety Authority (Transport Network Company, Owners, Drivers and Passengers) (Amendment) Regulations, which are currently undergoing public participation.

The online taxi industry employs between 300,000 and 350,000 active drivers, TIFA found, although women account for just 3 per cent of the workforce.

Fifty-three per cent of drivers rely on the platforms as their main source of income while 47 per cent use them to supplement other earnings, together supporting an estimated 1.2 million to 1.75 million households.

"It has the largest concentration of active ride-hailing passengers and drivers," TIFA noted, referring to Nairobi.

Most trips are for essential needs, with 72 per cent of users booking rides for commuting to work or school, business trips, shopping, errands and emergencies.

Another 29 per cent use the services for social and leisure activities, commuting and parcel delivery, while Nairobi users average one to two trips a week, translating to 6.8 rides a month.

Passengers who opposed the proposed minimum fare cited high costs and urged the government to instead reduce fuel prices to ease pressure on users. Those supporting the plan argued that drivers deserve better pay and that higher fares could support improved service.

"While improving driver earnings is widely recognised as an important objective, passengers remain concerned about affordability," the findings show.

Sixty per cent of respondents said they would abandon ride-hailing services in favour of matatus, boda bodas, walking or personal vehicles if fares rose.

Another 22 per cent said they would remain on the platforms but change their habits by switching to cheaper options or riding less often while 18 per cent said they would not change their behaviour.

"Nairobi provides the most relevant and policy-significant environment for evaluating the potential impact of the proposed minimum fare framework because it is the country's largest and most active ride-hailing market," TIFA observed.