Uber exploiting Kenyan taxi drivers, House committee told
By Wilfred Ayaga
| February 28th 2017
A parliamentary committee was yesterday shocked to learn that Uber International, which has contracted thousands of drivers across the country, does not remit taxes to the Kenya Revenue Authority (KRA).
Members of the Transport committee heard that Kenyan taxi drivers were trapped in slave-like contracts with the faceless company registered in the Netherlands.
The committee heard that operators were caught up in divide-and-rule tactics employed by the foreign company, which they claimed had taken advantage of legal loopholes to ride roughshod over them and dodge the KRA tax net.
Simon Mutembei, one of the operators, shed tears as he told the committee how taxi drivers who took loans to buy cars after getting irresistible offers were unable to repay them after the online company reduced fares.
"The drivers are stranded and at the mercy of banks and auctioneers," he said. "When they come, they offer very good incentives. They even give you money to stay online. Once you're inside, many complications arise. How do you repay your loan when they reduce their fares?"
And Peter Mbugua, a former Uber taxi driver in the United States, said: "Once they come into the country, they use divide-and-rule tactics. They tell drivers, if you are online, we will pay you Sh1,000. When they came into the country in 2015, a car would make up to Sh20,000 per day. They used the high returns to market themselves and got everyone hooked. It is like hooking someone on drugs. Personally, I was addicted to it."
Mr Mbugua told the committee unlike in the United Kingdom and the US, Kenyan online taxi operators were exploited.
"Terms in the UK and the US are favourable. Drivers even have medical cover."
Although there are over 10 online taxi operators in the country, Uber is by far the most popular, with thousands of drivers across the country. Its local partner is Uber Kenya.
The team heard that drivers had been forced into skewed contracts with various taxi companies. The local operators were also unable to revert to the old tax model, which has slowly collapsed as the foreign companies lure more people into their online operations only to abandon them midway.
The lawmakers termed the online taxi services a "pyramid scheme" following revelations that it skims 25 per cent of all revenues, leaving the drivers to cater for other expenses such as loan repayments and insurance.
Drivers are also left to cater for attendant taxes since Uber's share of revenue is automatically deducted once a client pays his fare online.
"There is no difference between Uber and pyramid schemes. It is our duty to ensure that people are not exploited. We don't need another pyramid scheme," said committee chairman Maina Kamanda (Starehe).
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