Kenya’s ride-hailing sector is in regulatory limbo, with significant gaps in the formulation and implementation of policies meant to govern the industry.
This follows, among others things, the delay by Parliament in releasing the updated sector guidelines.
At the centre of the debate is the controversial 18 per cent commission cap imposed on platform companies, which industry players claim was introduced without proper consultation or adherence to legal processes.
Before the 2022 regulations, online taxi companies operated in a free market, charging commissions of 20 per cent or more.
According to Bolt public policy manager George Abasy-Nengo, the regulations—governed by the National Transport and Safety Authority (NTSA)—were passed without conducting the mandatory regulatory impact assessment, a process stipulated under the Statutory Instruments Act.
“The Ministry of Transport and NTSA failed to conduct a regulatory impact study or provide evidence of public participation before the regulations were tabled in Parliament. This oversight undermines the foundation of the policy,” said Abasy-Nengo.
This study is designed to assess the economic and market impact of proposed regulations and ensure public participation in the process.
Bolt argues that the gaps in the regulation have caused persistent challenges, including disputes over fair pricing mechanisms and driver earnings.
According to the ride-hailing firm, Kenya’s commission cap of 18 per cent is among the lowest globally, with neighbouring Tanzania setting a cap of 25 per cent.
However, stakeholders argue that a lower cap has not translated into better earnings for Kenyan drivers.
Instead, the lack of clear pricing structures and regulatory coherence continues to fuel protests and dissatisfaction in the sector.
“We’ve seen driver protests year after year, and the core issue remains unresolved: the absence of a regulatory framework that addresses pricing mechanisms and commission caps,” added Abasy-Nengo.
“Platform companies have their own systems for setting prices, but the regulation offers no guidance or market-based benchmarks. This gap leaves both drivers and passengers vulnerable.”
Despite the ride-hailing firms taking the lowest commission, taxi drivers have been pushing for it to be lowered further.
The chairperson for the Organisation of Online Drivers, Justin Nyaga, says that the amount drivers are getting cannot even meet the maintenance of the taxis.
“The amount they (ride-hailing firms) are paying for maintenance per kilometre is less than the amount drivers pay,” said Nyaga.
In addition to pricing issues, Bolt says that the regulations fail to address other critical operational gaps, such as verifying driver documents, integrating government databases for seamless checks, and aligning licensing requirements with global best practices.
“To the extent that we have been having discussions with the regulator NTSA, they know it’s on record that all the players in the market. At least the majority of the players have raised these issues with the regulator.”
The Ministry of Transport and NTSA had previously committed to rectifying these issues by conducting a post-fact regulatory impact study, but no progress has been made since the promise was made in early 2023.
Letters exchanged between industry players and the ministry have
yielded no tangible outcomes.