Barely a year after Tanzania capped the commissions e-hailing companies like Uber and Bolt charge their partners at 15%, the responsible authority has backtracked on the order, sweeping away drivers’ prospects of higher earnings.
The fee was increased by 25% effective Sunday after the Land and Transport Regulatory Authority (Latra) issued a notice on Dec. 30, which replaced the original guidance from March last year. Latra sets and approves rates for all operators, including those in the ride-hailing industry.
Uber and its main rival in Europe and Africa, Bolt, shut down some of their services in April last year, claiming cutting commission on partners would hurt their revenues. However, the lower fee meant higher incomes for drivers, who, like their counterparts in Kenya, have historically protested poor revenue from the apps.
Uber resumes full operations in Tanzania
Uber, which shut down UberX, UberXL and UberSave services in April, began efforts Monday to resume full operations, TechCrunch 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 have made the difficult decision to discontinue our operations in Tanzania as the regulatory changes being implemented created an environment where it was challenging for our business to operate. We have continued our engagements with LATRA and other regulators in Tanzania since the break as a demonstration of our commitment to resuming full operations in the marketplace, providing drivers with a way to earn money and passengers with an enhanced mobility option,” said Uber’s chief executive. communications East and West Africa, said Lorraine Onduru.
“We welcome the new pricing from 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 e-reporting services comes after stakeholders, including representatives from Uber and Bolt, lobbied for rate revisions; leading Tanzania to announce last September that a middle ground had been found and the companies would resume operations.
“Our efforts and commitments focused on ensuring a favorable regulatory environment for mobility services in Tanzania among drivers, vehicle owners, passengers and carriers. The overall goal was to develop the nascent ride-hailing sector in the market,” said a spokesperson for Bolt, adding that the company restored all of its services on October 13, 2022.
Bolt said it will make some changes to passenger pricing soon after LATRA’s decision.
Apart from Tanzania, Kenya also capped the commission at 18% last year after new regulations came into effect. Attempts by ride-hailing operators to scrap new rules have so far been unsuccessful.