Johannesburg - E-hailing drivers in Kenya will from this week enjoy better earnings after a transport regulator ordered major players such as Uber and Bolt to cap their commission at 18% in the East African country.
The Kenyan e-hailing drivers had participated in strike action demanding a reduction in commission to improve their earnings.
The developments in Kenya have raised hopes among some South African e-hailing drivers who have been calling for both Uber and Bolt to reduce their commission so they can improve their earnings on the apps.
Both Uber and Bolt in South Africa have no plans to reduce their commissions of over 25%, IOL can reveal.
E-hailing companies charge commission on each ride performed through the app.
In Kenya, Uber and Bolt have been forced to cap driver commission at 18% after charging similar commissions near 25%, as is the case in SA.
In South Africa, similar strike action, most recently in July, took place, as drivers demanded that Bolt and Uber hike prices to improve their earnings or reduce commission amid rampant fuel price hikes.
Bolt SA raised their prices, while Uber SA raised their base fares in response to the protests. No changes were made in commission, with Uber SA charging at least 25% commission and an additional 4% booking fee, whereas Bolt SA charges 23% commission and a 4% booking fee.
Both Uber and Bolt said the 4% booking fee was charged to the rider.
Bolt SA country manager Takura Malaba said reducing commission would make the business unsustainable in Mzansi.
“Lowering the commission paid by drivers will not make the business sustainable and will compromise the earnings that drivers earn on the platform.
“Bolt’s commission structure is lower than what many other similar platforms charge.
“Drivers that use Bolt keep between 6% and 10% more per trip than drivers using other platforms,” he said via email.
Uber SA spokesperson Mpho Sebelebele also said the company relied on the commission it charged.
“Each country’s needs are unique, so we take the time to understand each of the market's needs so we can be responsive and adapt accordingly.
“The service fee ensures the running of the Uber app, which comes out of Uber’s service fee from each fare. “The service fee also helps us maintain and make continuous investments to enhance our technology designed to meet the needs of riders and drivers,” she said.
In July, the International Consortium of Investigative Journalists released the Uber Files, and leaked data from the files showed that the e-hailing company turned a profit two years after launching in Cape Town and Johannesburg after it raised commission from 20% to 25%.
The files said the company raised the commission in 2015 despite local managers complaining that the increase would be harmful to drivers.
In response to the Uber Files, Uber said at the time that the company would not make excuses for past behaviour which was not in line with the company’s present values.
“Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come,” they said.
Both Uber and Bolt in South Africa have faced fierce protests from drivers, most recently in July, over commission, safety, and low earnings, among other issues.
Malaba said the commission paid by drivers was used to offer rider discounts, offer driver promotions, pay salaries, and pay for marketing and other business expenses.
“It is critical to remember that the circumstances between South Africa and Kenya are very different. The regulatory environment in South Africa is distinct, and the Competition Commission in its wide-ranging market study found that the structures adopted by businesses like Bolt are within the South African regulatory frame.
“We continue to be encouraged by the recent adoption of the National Land Transport Amendment Bill in the National Assembly last week, and look forward to co-creating a conducive operating environment in South Africa,” said Malaba.
He added that regulatory changes in Kenya were introduced prior to elections, and regulators and Parliament were reviewing the implementation of that commission cap.
Uber confirmed that its service fee had dropped from 25% to 18% in Kenya, and said it was committed to finding “workable solutions” and that they were excited for their future in the East African country.
Sebelebele said the Uber platform was only a success if drivers were successful and said they were committed to engaging drivers about their concerns.
“Several fare increases have been implemented this year alone, and we recognise drivers' pressures, including the increasing cost of living.
“We are constantly looking for ways of helping drivers increase their earnings on the platform to help their independent businesses grow while providing riders with more cost-effective options of moving around,” she said.
Sebelebele said that in the current economic climate earnings fluctuated due to seasonality and the macroeconomic environment.
“Where fares are set too high, there could be a risk of fewer or no requests from riders, meaning fewer or no earning opportunities for drivers.
“We run regular roundtables, both in person and virtually, that are attended by hundreds of drivers and delivery people across the country.
“These sessions represent a diverse range of drivers and delivery people, helping to ensure Uber understands the concerns of drivers across a broad spectrum,” said Sebelebele.
IOL