Digital taxi drivers win fight for new rates as strike disrupts market

When a section of digital taxi drivers held demonstrations over low rates. [File, Standard]

Digital taxi drivers can now breathe a sigh of relief after they won the fight for new rates.

The Ministry of Transport on Tuesday directed the digital taxi app owners to improve the rates to align with the pricing advisory issued by the Automobile Association of Kenya in 2023.

While Kenyans brace themselves for higher fares, the rates Mr Paul King'ori, Director for Road and Railway Transport said the new rates will see drivers get Sh33.1 per kilometre for vehicles of up to 1050cc up from Sh22.

Speaking on behalf of Cabinet Secretary Davis Chirchir, Mr King'ori said those with vehicles ranging from 1051cc to 1300cc will get Sh36.8 per kilometre up from Sh26.

The new rates he said is an increase of about 50 per cent.

While urging for patience from industry players, King'ori said the ministry is in talks with World Bank to engage a consultancy to help draft the National Taxi Pricing Policy as a long term strategy for the sector.

The development comes even as ride-hailing firm Little Cab posted an influx of drivers and riders after the nationwide strike by digital taxi operators crippled services across major platforms including Uber, Bolt and Faras.

The industrial action, which began on November 3, followed a directive by the Amalgamation of Digital Transport Organisations, Kenya, instructing drivers, vehicle owners, digital taxi captains and boda boda operators to switch off all ride-hailing applications and join demonstrations.

The notice, signed by Joint Chairs Daniel Manga and Justin Nyaga, cited persistent grievances over low trip earnings, rising operating costs, opaque commission structures and slow dispute-resolution mechanisms.

Little Cab, however, remained fully operational.

The strike has exposed structural weaknesses in Kenya's fast-growing digital transport ecosystem, particularly the dependence of global platforms on high commissions and automated pricing systems that drivers argue have eroded their take-home earnings.

Little Cab in a statement to newsrooms said it experienced an exceptional surge in new driver onboarding, rider registrations and corporate mobility enrolments within the first 24 hours of the strike.

According to CEO Kamal Budhabatti, onboarding teams worked extended hours to process applications, yet the platform sustained uninterrupted service with no downtime, even as traffic volumes rose sharply.

A key point of attraction for drivers he said, was the firm's comparatively lower and more predictable commission regime.

Little Cab charges an 18 per cent commission on the value of every trip for both corporate and cash rides, although it has gone as low as 15 per cent in the past.

The rate Mr Budhabatti said was set in line with government regulations capping ride-hailing commissions at 18 per cent.

The CEO said promotions are structured in a way that drivers receive the full credited amount, and the company retains the flexibility to adjust prices based on market dynamics.

"Drivers switching to Little from rival platforms said these features offered greater transparency and better earnings visibility, especially at a time when global platforms faced accusations of unpredictable deductions," he said.

He also said that corporate users also gravitated towards the platform, drawn by its pricing consistency and the absence of extreme surge costs during the disruption.

"This reflects long-standing market dynamics rather than opportunism," he said, adding, "Drivers want dignity and riders want reliability. Little has built its model around this simple truth, and today the market is speaking for itself."

Budhabatti emphasised that the company would continue scaling cautiously to maintain service quality.

"We don't celebrate disruption, we celebrate choice, drivers and riders choosing Little tells us we are doing something right," he said.

He noted that Little intends to uphold its focus on fair driver earnings, transparent pricing, reliable rider experiences free from pricing shocks, and enhanced safety and welfare for both drivers and passengers.