Uber to hike fares to offset skyrocketing fuel prices

Uber Kenya will raise charges in the next two weeks in order to appease its army of agitated drivers who are demanding compensation for the rise in fuel prices.

Imran Manji, Uber’s East Africa head, stated that the business is working on a price increase to account for the recent gasoline price increase.

Mr Manji stated that the company is attempting to find a sweet spot between not eliminating demand by pricing and ensuring that drivers cover their costs in the face of increased living costs and tough competition in the ride-hailing industry.

The announcement comes after fuel prices rose by Sh9 per litre on Tuesday, marking the fourth straight increase since February.

“We are looking at the pricing, and there is more chance than not that we will be reviewing our rates upwards in order to factor that fuel price increase,” said Mr Manji.

Drivers of digital taxis on apps like Uber, Bolt, Little Cab, and Have previously protested about the rising cost of fuel eating into their profits, which have also fallen due to a surplus of drivers and players in the business.

In Nairobi, the price of super and diesel is currently Sh159.12 and Sh140, respectively, setting the groundwork for additional increases in the cost of living at a time when inflation has reached a 27-month high.

Since last year, the industry has been reeling from decreased riding activity due to work-from-home policies and lower revenues by individuals and businesses amid the 2020 pandemic.

“It’s a difficult situation in the market right now because as the cost of living of everybody goes up, the affordability of things like ride-hailing comes into question. If we raise our prices too high; when the majority of people are already feeling price pressure on daily necessities, we are limiting how many people are going to be using our services and also limiting the driver of earnings,” Manji added.

Currently, Uber Chap Chap, the company’s low-cost and widely used service, charges a minimum fare of Sh150 and a maximum fare of Sh250 per kilometer. Uber X, which is more expensive, charges a minimum of Sh200 and a maximum of Sh380 per kilometer.