Uber has raised its ride prices, including the minimum fare, in response to pressure from its drivers, who have protested its prices for months and even resorted to setting their own prices in recent weeks.
In an announcement on Monday, the company said the price increases would be across its products, and revealed a 10% adjustment to the minimum wage. However, the company remained tight-lipped about how the price increases would affect its various products.
“The math is done as of today,” said Imran Manji, Uber’s head of East Africa. “We had to first analyse the prices, look at the data, and talk to our drivers, who we have roundtables with almost every week. We have done our analysis and now we have increased the prices of all our products.”
While the company has been tight-lipped about how prices for different products will change, it has indicated that the lowest fare a rider can pay — the minimum fare for Uber’s Chap Chap product — will increase by 10 percent.
“If you are going to travel on the road only, we will give you the minimum to make sure the driver is compensated for the shortest journeys. The minimum fare for Chap Chap is now Sh220; this was Sh200,” Mr Mangi said.
Uber says its pricing mechanism (algorithm) takes into account factors such as the minimum fare, the starting fare, the fare per kilometer which is based on the distance traveled, and the fare per minute which takes into account the time it takes to complete the trip.
Uber’s fare adjustment comes after riders complained that drivers were charging more than the price shown on the app, which was generated by the company’s algorithms. Drivers have resorted to producing their own fare guides, which they print, laminate and stick in their cars for customers to see.
Mr Manji said the drivers’ protests were “an input, but not the deciding factor”.
“Even before the protests, we increased the price of Uber Comfort about eight weeks ago because demand was good and it was necessary to increase the number of vehicles on the product. It is an input, but it is not the most decisive input, there are many other conditions,” he said.
After months of driver protests against the pricing mechanisms implemented by ride-hailing companies, several other companies have adjusted their prices, but Uber has remained adamant about its position.
“We hope this behaviour of price negotiation stops now,” Manji said on Monday. “We encourage all passengers to report it to us directly or via the app if they find themselves subjected to it. We also ask all passengers to report any behaviour where a driver asks for a higher amount than what is stated on the app.”
“Overall, we believe we have struck a good balance between increasing prices for drivers while maintaining reasonable prices for passengers,” he added.
The company has been caught in a bind of dealing with grumbling drivers who feel its fees are small compared to its costs, as well as a price-sensitive Kenyan market where any slight increase in prices results in a drop in customers.
Uber, which offers about eight different products in the country and has more than 20,000 drivers on its app, says it has had to invest heavily in weekly promotions, where riders pay less than the average fare for a trip, to encourage more trips.
Uber also says it has recently noticed an increase in customer complaints about drivers asking for more money for rides, though it has not disclosed numbers.
“We can’t provide that number,” said Lauren Ondoro, Uber’s head of communications in Kenya. “But we do have channels through the app where you can complain about a particular ride, and then we can start investigating and taking action. We’ve seen reports coming in and we’re taking action.”