Barely 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 backtracked on the order, taking away drivers' prospects of increased earnings.
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effective last Sunday after the Land and Transport Regulatory Authority (Latra) issued a notice on December 30, which superseded the initial direction of March last year.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 main rival in Europe and Africa, Bolt, halted some of their services in April last year claiming that reducing the commission on partners would dent their earnings. However, the reduced fee meant increased incomes for drivers, who have in the past, like their counterparts in Kenya, protested poor earnings from the apps.
Uber resumes full operations in Tanzania
Uber, which halted UberX, UberXL and UberSave services in April, kicked off efforts to resume full operations Monday, TechCrunch has learned, joining Bolt, whose services were restored in October. Uber charged a 25% commission, while Bolt charged 20%. Their withdrawal left the market to homegrown brands like Little, which charges a 15% commission, and Ping.
“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,” said Uber’s East and West Africa head of communications, Lorraine Onduru.
“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 stakeholders, including representatives of Uber and Bolt, lobbied for the rates to be reviewed, leading Tanzania to announce last September that a middle ground had been found and the firms would resume 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.
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.