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Uber gets 71pc more business after price cut

NEWS
By Lee Mwiti | October 18th 2016
Uber has said its drivers are making 71 per cent more trips since the taxi-hailing company slashed charges in Nairobi. PHOTO: COURTESY

Uber has said its drivers are making 71 per cent more trips since the taxi-hailing company slashed charges in Nairobi.

Janet Kemboi, Uber’s spokesperson for Kenya, told The Standard that the number of new riders per week had increased, even as the firm faces increased competition in the sector.

“We currently get more than 100,000 people opening our app every single month looking for new rides,” she said.

In July, Uber lowered its charges in Nairobi by 35 per cent to respond to mounting competition from similar applications, including Safaricom and Craft Silicon’s Little Cab.

The US-headquartered firm reduced its charges per minute to Sh3 from Sh4, and cut the pricing of short rides by Sh100 to Sh200. Its commission, however, remained unchanged at 25 per cent.

The move sparked protests from some Uber drivers, who demanded a reversal in the price cuts or to be charged a lower commission.

Kemboi said the reason the price cuts faced opposition back when they were first announced was because Uber did a poor job explaining the reasons behind the lower rates to its drivers.

“We have done a lot of price cuts in cities all over the world, so we have a good sense of how they work and plenty of data to back up our assumptions. So far, the price cut has doubled the number of first-time users, showing that the lower prices are attractive to even more people,” she said.

“The increase in demand means more trips for drivers despite lower prices for riders. We’ve even seen a small decrease in the number of hours drivers are using Uber, as they can now earn as much as before or more quickly.”

The firm added that it is not worried about the growing competition it is facing from the many companies that have waded into the market, and is instead concentrating on increasing the number of riders using its services.

“The price cut in Nairobi is working. Drivers are getting more trips and they’re spending less time waiting for the next passenger and, therefore, not earning money,” Kemboi said.

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