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Standoff as Uber, Bolt fares to rise sharply on new rule
The proposed regulations require a transport network company to ensure that affiliated drivers or motorcycle riders get a minimum compensation per trip.
The Ministry of Roads and Transport has introduced a new minimum compensation per trip for drivers of ride-hailing taxis and motorcycles, triggering a standoff with host platforms amid concerns about a sharp rise in fares.
Official correspondence seen by the Business Daily shows that the ministry is at the tail-end of gazetting the new regulations, which insiders said would nearly double the current base passenger fares of about Sh220.
In a letter to the 18 ride-hailing platforms, the Principal Secretary for Transport Paul King’ori set a July 6 deadline for public participation of the planned minimum pay, with the companies required to suggest their rates.
“In compliance with Article 10 of the Constitution of Kenya on public participation, please find attached the Draft National Transport and Safety Authority (Transport Network Company, Owners, Drivers and Passengers) (Amendment) Regulations 2026 for your review and comments before finalisation and gazettement,” Mr King’ori said in the letter dated June 30, 2026.
Industry sources, however, revealed that the ride-hailing firms snubbed the request for submissions after the State failed to reveal its recommended rate for minimum compensation per trip.
Minimum compensation model
“We kept off the engagement because we feel there is a need for a more comprehensive review of the impact of this decision. The minimum compensation model being fronted by the State is flawed and will kill demand and harm the drivers,” a senior executive of one of the ride-hailing platforms told the Business Daily.
“The present base charge on fare is about Sh220, and the State’s move would see this rise significantly. They have declined to make an official disclosure of the rate, though word is that it may be set at between Sh400 and Sh500. This would be disruptive because very few passengers would afford it and the demand side of the equation will suffer heavily.”
A copy of the proposed regulations published by Roads and Transport Cabinet Secretary Davis Chirchir did not contain the minimum compensation rates, fuelling suspicions among the ride-hailing platforms.
Mr Chirchir had not responded to a request by Business Daily for a comment by press time.
“It is mischievous for the State to withhold the planned rates from us yet expect us to engage it over its plans,” another industry executive said.
According to the proposed regulations, a transport network company would be required to ensure that affiliated drivers or motorcycle riders get a minimum compensation per trip, exclusive of platform commissions, taxes, levies, fees and other deductions.
“The prescribed minimum trip compensation shall apply irrespective of distance, duration, dynamic pricing, promotional discounts or any other pricing mechanism,” the regulations said in part.
“A transport network company shall not offer promotional or discounted pricing that results in payment below the applicable minimum trip compensation.”
The regulations show that the minimum compensation rates for drivers would be pegged on the engine capacity of their motor vehicles or motorcycles.
The regulations show that the minimum compensation rates for drivers would be pegged on the engine capacity of their motor vehicles or motorcycles.
For motor vehicles, the payouts would be different for those with a capacity of between 501 and 1,500cc and those above 1,500cc.
Kenya has since 2014 registered a major surge in the number of both local and international taxi-ride hailing app operators or transport network companies(TNCs), especially around key towns, fuelled by a rapidly growing middle-class population, which has significant disposable incomes and access to internet-enabled smartphones.
Data by the Roads and Transport ministry shows that about 35,000 drivers are currently registered on the ride-hailing platforms, with most drivers cross-listed with different apps. On average, they collectively complete approximately 175,000 rides/trips per day across all network companies nationwide.
As part of a strategy to boost the performance of the industry, the ministry targets a new national pricing model for both conventional and ride-hailing taxis, setting the stage for a fresh shake-up for big players in the industry, including multinationals Uber and Bolt.
The State aims to review driver and operator cost structures to determine minimum viable fares, and design a fare structure including the base fare, distance, time rates, minimum fare, and surcharges.
The Transport ministry said the absence of a national pricing policy is fanning chaos amid price undercutting fights among rival taxi companies and operators, as well as widespread complaints about low earnings that often fail to cover key expenses such as insurance, maintenance, and wear and tear.
Capping of commissions
Following complaints by drivers and taxi owners, the Transport ministry, through the National Transport and Safety Authority (NTSA), developed the Transport Network Companies, Owners, Drivers and Passengers Regulations 2022, which contained a bundle of provisions, including the capping of commissions charged by TNCs such as Uber, Little and Bolt at 18 percent.
The capping of commissions has, however, failed to stop the fights among industry players amid conflicting interpretations of the rules.
“The issue of capping commissions in the ride-hailing industry remains highly contentious --with some ride-hailing drivers and vehicle owners supporting the capping of commissions, arguing that the earnings are sustainable,” the Transport ministry said.
“Whilst others, including ride-hailing app owners, argue that capping of commission will be an obstacle to a vibrant free marketplace, thereby reducing investment, discouraging innovations, and ultimately disadvantaging Kenyan consumers.”
Faced with this dilemma, the State now says it plans a new national policy that would attempt to end the fights, hoping to benchmark on other jurisdictions such as South Africa, the EU, the UK, and Singapore.
“The overall objective is to develop a national taxi policy that provides a coherent, sustainable, and harmonised framework for regulating, managing, and promoting safe, efficient, inclusive, and sustainable taxi services in Kenya,” the ministry said.
The work plan shows that the State would review the existing taxi policy and regulations for conventional taxi and ride-hailing taxi covering boda boda, tuk-tuks (three-wheelers), and e-bicycles.
