Uber files appeal against 18pc service fee ruling
Ride-hailing app Uber has filed an appeal to annul a ruling that seeks to cap commissions paid to them at 18 per cent, arguing that Kenya is a free market economy in a legal battle that could change the industry forever.
This comes a few months after Tanzania capped the commissions at 15 per cent forcing Uber to suspend operations. The developments are building on years of protests and wars between ride-hailing companies and their drivers arising from heavy price cuts due to competition that left the drivers as the losers.
Digital taxi firms including Uber charge 25 per cent commission which means they stand to lose 7 per cent of their margins if the new ruling is effected. Most of the drivers have since pulled their cars from the taxi platforms opting to keep them at home due to very low margins.
“The introduction of 18 per cent as the ceiling for allowable commission has the potential to stifle innovation and reduce the petitioner’s economic feasibility of investing in the market,” the lawyers of Uber, Coulson Harney LLP said in court filings.
The lawyers said Kenya is a free market economy and service providers have a right to set prices in the market in line with the laws of demand and supply. The ruling could also hit other players including Bolt, Little and many others in the market.
Uber’s communication office, however, assured that they will not suspend operations in Kenya like they did in Tanzania.
“We remain committed to Kenya and ensuring that more drivers and riders can experience the benefits of ride hailing,” Uber’s East and West Africa communication lead told Techcrunch, a US-based Technology news platform.