In the short time since Tanzania capped commissions e-hailing firms like Uber and Bolt charge their partners at 15%, many drivers have seen their earnings increase substantially. However, as of late, the Tanzanian regulatory authority has backtracked on the order, taking away drivers’ prospects of increased earnings. This may be due to pressure from e-hailing companies themselves or other vested interests, but it remains to be seen what effect this will have on driver morale and business growth in Tanzania.
The recent increase in the ride-hailing fee has left many riders feeling frustrated. The 25% increase went into effect last Sunday, after Latra—the authority that sets and approves fares for all operators including ride-hailing companies—issued a notice stating that the previous direction of charging 20% would be superseded. While some stakeholders have argued that this fee increase will help to fund necessary safety improvements, others feel like it is unfairly punishing those who rely on ride-hailing services for everyday transportation.
Uber and Bolt have both been hit by protests from their drivers in recent years over low incomes and poor working conditions. However, reduced commissions on partners meant increased incomes for drivers, who have in the past, like their counterparts in Kenya, protested poor earnings from the apps.
Uber is back in full operations in Tanzania after a delay. The company faced some criticism over its work in the country, but it has since made changes.
The revival of Uber’s three services comes as a relief to the market, which has lacked a particularly reliable and affordable option in recent months. Bolt, whose services were restored in October, charges 20% while Little, which charges 15%, have been the most popular homegrown brands.
Since the pause in operations, Uber has been working with LATRA and other regulatory bodies to create a more favourable environment for their business. They hope to resume full operations soon, providing drivers and riders with an upgraded mobility option.
Since the price order was issued, Onduru has seen a rise in bookings and is excited for the future integration of ride-hailing into Tanzanian society. The companies that are compliant with the new order will have access to discounted rates for public transportation, making it easier for people to get around town and further strengthening Tanzania’s already growing economy.
The re-opening of the Uber and Bolt e-hailing services in Tanzania comes as a relief to stakeholders, including representatives from the firms themselves. After lobbying for rates to be reviewed, officials came to a middle ground and allowed the companies back into operation. However, there has been some criticism of how much these corporations are charging on Tanzanian streets.
Since Bolt reinstated its services in Tanzania, the ride-hailing industry has taken off and is now a popular way to get around. The company’s efforts have helped development of the nascent market and enhance the experience for users. In addition, this development has reduced reliance on personal cars, which is a positive step for the environment.
Faith in Bolt’s new changes has been bolstered by its previous track record of reform, most notably with the introduction of its ‘Prepay’ system which allows passengers to pay for their travel in advance. While some may be concerned that this could lead to an increase in fares, Bolt is confident that it will only result in a better experience for its customers.
Some ride-hailing operators have pushed for new regulations that would scrap the cap on commissions, in order to compete better with traditional taxis. However, so far these efforts have been unsuccessful. The regulation limiting commissions to 18% was put into place in order to regulate the industry and protect consumers. While it may be tough for ride-hailing operators to make a significant dent in the market share of traditional taxis, they are likely still trying.
