Players in Kenya's ride-hailing industry are in discussions with the government over a possible review of the commission rate set in 2022 and other sector reforms.
Industry leaders argue that the 18 per cent commission cap, currently the lowest globally, was implemented without a proper regulatory assessment.
Bolt’s Public Policy Head, George Abasy-Nengo, faulted the rapid introduction of the commission cap by the Ministry of Transport during the passing of the regulations.
He added that the lack of a regulatory impact assessment to guide the price and commission caps left gaps in the policy, which could have resulted in a different commission rate.
“The ministry chose to pass the regulations quickly, what was required was to conduct a regulatory impact assessment of the market to inform the price cap and commission cap. Maybe it would have been higher, may be it would have been lower, and it would have informed pricing,” said Abasy-Nengo.
In July 2022, the government-imposed rule to cap commissions payable to digital taxi-hailing apps by drivers at 18 per cent, down from 25 percent.
The commission rate is a major sticking point, with ride-hailing companies claiming it undermines their ability to operate profitably in Kenya's competitive market.
"The law sets the rate at 18 percent, but the Kenya Revenue Authority (KRA) expects us to collect 4 percent VAT from customers, something we haven't been doing, though some competitors have," said Bolt Kenya General Manager-Rides Linda Ndungu.
Nengo added that the real issues that need to be addressed are the gaps in the regulations and arriving at a commission capping that would take care of the driver but also the interests of the riders.
He said that similar attempts in Tanzania to cut commission by 15 percent led to companies exiting the market.
“Tanzania tried to be populist like Kenya and reduce the commission by 15 per cent, no company could run the market, so people and players like us pulled out of the market It was only later that we managed to do the regulations properly, and the commission cap was set at 25 per cent and this sorted the drivers’ and riders’ problems,” said the Public Policy Head.
The Star has established that the Ministry of Transport is currently engaging stakeholders to address the regulatory challenges, aiming to shape future policies that reflect the needs of both drivers and operators in Kenya’s ride-hailing sector.