Kenyan Economy

How Uber and bolt continue to thrive in Kenya as drivers and partners suffer under heavy debt

Uber Chap chap the cheaper option for Uber. image/courtesy

The entry of Uber in Kenya was godsent to a majority of Kenyans who used to operate taxis before. Though received with a lot of resistance as the new digital taxi rolled, most of the drivers in the old taxi business late had to ship up to survive.

With time, the resistance waned off and a number of traditional taxi drivers who saw the opportunity in the new taxi era shifted to Uber. But the demand for new and more fuel-efficient cars as a requirement for joining uber ruled many who could not afford this out. the earnings were good, and the owners of cars o the platform (partners) were making a kill from their investments with weekly payments of up to Ksh.15,000 and more.

The drivers too were swimming in cash, most of them ended up saving and buying their own cars to use for digital taxis. According to James, a partner at Roysambu, the good returns generated a lot of interest from Kenyans, and soon, every Kenyan wanted to own a car, if not several on uber. Most went for loans in an attempt to make akill and with proven return on investments which guaranteed a fast recoup of the invested amount

As uber business thrived, Taxify (now bolt) joined in, and it was not long before Safaricom came up with Little cab as the demand for digital taxis rose.

Pain at the pump: Kenyans to pay more for fuel beginning midnight today

Fuel prices will sharply increase from today based on the prices released by ERC. Image/courtesy

The entry of these new entrants brought about a new level of competition. Little cab focus was on a given niche, focusing on the high-end clients (corporate clients) and its limited focus paid off well based on the trust most companies and individuals had on Safaricom.

But it is between bolt and uber that a new war for riders was shaping up. Bolt focussed on winning more drivers to ensure that the company was able to penetrate the market that was already crowded by Uber. To do this, bolt offered riders discounted rides, sometimes even giving them free rides at the same time, bolt charged drivers on the app a commission of 15% as opposed to Uber’s 25% commission for every ride.

Over time, each of the two platforms continued to significantly reduce their trip charges for the riders to a level that drivers could no longer make any meaningful amount while driving for them. To make it worse, companies like Bolt had gone on a recruitment drive for more drivers and registration of more cars such that with time, there were so many cars for riders to choose from meaning fewer and fewer trips for the drivers as they fought for the few available riders. The two platforms then started registering cheap categories for riders (bolt go and chap chap) for small engine cars o less than 1000cc, leaving partners and drivers with 1300cc cars with no rides as Kenyans definitely opt for cheaper options.

This situation worsened around 2019 to a point that most partners who had taken cars on loans had their vehicles repossessed. Read any auctioneer advertisements for cars in local dailies today and over 90% of the cars being auctioned are cars acquired for digital taxis. Most of the partners on sensing the difficulty of getting commission from their drivers opted to withdraw and park their cars leaving so many drivers jobless. A visit to their Facebook page will reveal so many drivers looking for partners on any of the online platforms.

An attempt by the drivers to talk to the digital taxi companies has never borne fruits and the government still mum on reforming this sector that employs over 30,000 Kenyans despite a promise of looking into the matter.

AS this happens, the livelihood of thousands of young men and women remains in jeopardy.

To understand how it is to work for uber, one Uber and bolt driver from Thika narrated how he operates in order to make a living on the apps. When he leaves his house on Wednesday, he packs enough clothes in the trunk of his car to last him till Sunday. To start his journey, he puts the app on and waits for a request, hoping that the request will be to the City. when he gets to the city, he works and sleeps in the car until Sunday because it would never make any business sense for him to drive back and from Thika without a client. He goes back home on Sunday morning and takes a break to recuperate until Wednesday again.

According to him, weekdays are the worst, but Saturdays and Sundays can turn out to be good.

Most drivers we spoke to expressed their frustration on the apps and partially on the government. “You can do up to 6 rides and still not earn more than 1k; and still, you are supposed to eat, fuel the car, pay the owner and pay a 25% commission to the company. this is theft” one driver exclaimed.

To other drivers, not only do they have to earn less, but police and Nairobi and Machakos county officers will arrest them for dropping passengers in the city or in Machakos County and the least bribe you will have to part with is 3k, ” The moment they see the PSV insurance sticker, they pounce on you with no mercy, and you have to bribe your way out” says Dennis a driver at Utawala.

The last time the drivers had a strike, Politicians Johnson Sakaja and Mutula Kilonzo Junior promised to look into their issue and find a solution to their woes, it’s one year down the line.

And now, the drivers have vowed to go back to the streets to force Uber, bolt, and Little to talk to them. Who will speak for them this time around?