Uber Kenya, already one of the company’s most affordable services in the world, charges a minimum fare of $2.90. The company announced in April that it will be introducing an even cheaper service at half that price, $1.45, by allowing its drivers to use much older, lower-quality cars.
The San francisco based company has quickly expanded across parts of Africa, where it is seen by those signing up as drivers — or “partners” in the Uber lingo — as a rare job opportunity on a continent with stubbornly high levels of unemployment. But the service has stirred debate over how low fares should go, and the company has faced a series of strikes from South Africa to Lagos. This month, drivers in Lagos, Nigeria’s biggest city, went on strike after fares were slashed by 40 percent.
Faced with fierce competition from other ride-hailing apps, Uber’s latest service in Kenya, critics say, would pit its own drivers against each other in a kind of cannibalistic race to the bottom, eroding what little they already earn.
According to New York Times, Uber insists that the new service would allow drivers to save on fuel and other expenses, ultimately making their jobs more profitable.
“Revenues might not be higher, but the costs will be lower, so ultimately profits will be higher,” Alon Lits, Uber’s general manager for sub-Saharan Africa, said in an interview. “We believe our economics make sense,” he said, but added that the company was in the process of getting feedback from drivers in order to “interrogate our assumptions before moving forward.”
In Nairobi, Uber and its competitors like Taxify, an Estonian company, and Little Cab, a company owned by Kenya’s mobile network giant Safaricom that offers free Wi-Fi in its cars, are aiming to capture clientele from a rising, but fragile, middle class that still values affordability, sometimes at the expense of quality of service or even vehicle safety. Competition is fierce even among apps for notoriously dangerous boda-bodas, or motorcycle taxis, which are a major cause of road accidents.