Uber, Bolt Drivers Hope for Increased Earnings Foiled as Tanzania Reinstates 25% Commission
Hardly a year after Tanzania capped the commissions that e-hailing firms like Uber and Bolt charge their partners at 15%, the authority in charge has backpedal on the order, taking away drivers’ anticipation of better take home pay.
The fee was increased to 25% effective last Sunday after the Land and Transport Regulatory Authority (Latra) issued a notice on December 30, which superseded the initial direction of March last year. Latra sets and approves fares for all operators, including those in the ride-hailing sector.
Uber and its principal adversary in Europe and Africa, Bolt, ended some of their services in April last year on the grounds that reducing the commission on partners would dent their earnings. However, the reduced fee meant increased income for drivers, who have in the past, like their counterparts in Kenya, raised objections to the poor earnings from the apps.
Uber resumes full operations in Tanzania.
UberXL and UberSave services in April, begun efforts to resume full operations on Monday, joining Bolt, whose services were reinstated in October. Uber charged a 25% commission, while Bolt charged 20%. Their pullback left the chance to homegrown brands like Little, which charges a 15% commission, and Ping.
Lorraine Onduru, Uber’s East and West Africa head of communications, said.
“We made the difficult decision to pause our operations in Tanzania because the regulatory changes that were introduced created an environment that was challenging for our business to operate under. We have, since the pause, maintained our engagements with LATRA and other regulatory bodies in Tanzania as a show of our commitment to resume full operations in the market, providing drivers with an avenue to earn and riders an enhanced mobility option”.
“We welcome the new pricing order issued by the Land and Transport Regulatory Authority, which we believe will significantly contribute to the growth and development of the ride-hailing industry in Tanzania,” said Onduru.
The resumption of the e-hailing services comes after partners, including representatives of Uber and Bolt, brought in their influence for the rates to be evaluated, leading Tanzania to issue a statement last September that a middle ground had been found and the firms would recommence operations.
“Our efforts and engagements were aimed at ensuring an enabling regulatory environment for mobility services in Tanzania among drivers, vehicle owners, passengers and ride-hailing operators. The overall objective was to develop the nascent ride-hailing sector in the market,” said a Bolt spokesperson, adding that the company reinstated all its services on October 13, 2022.Transportation
Bolt said that following the decision by LATRA, it will soon introduce some changes on passenger fare pricing.
Aside from Tanzania, Kenya also capped commission at 18% last year, after new regulations came into force. Efforts by ride-hailing operators to have new regulations scraped have been unsuccessful so far.