Local ride-hailing company Yego wants the State to lower the commission that boda boda operators pay to 15 percent in a bid to boost their earnings, breaking ranks with other industry players, including Uber.
The company petitioned the Departmental Committee on Transport and Infrastructure to lower the cap from the current 18 percent, siding with operators who have also written to lawmakers to reduce the commission payable.
Yego’s stance contradicts that of others notably Uber, which decried the cap saying it threatens revenues for the companies besides stifling competition in the market.
Commissions for all operators contracted to ride-hailing apps are capped at 18 percent, according to the National Transport and Safety Authority (Transport Network Companies, Owners, Drivers and Passengers) Regulations 2022.
Local operators have severally decried the commissions, saying they are high and significantly eat into their earnings. These calls led to the gazettement of the regulations that capped commissions at 18 percent.
“The commission cap of 18 percent established for standard TNC (Transport Network Companies) vehicles should be revisited for two-wheelers and three wheelers,” Yego told the committee.
“We recommend a cap of 15 percent, which is more sustainable given the lower earnings per trip for these types of vehicles.”
Yego’s push, if adopted by lawmakers and passed into law, will increase the take-home pay of boda boda operators with the earnings being higher for those making long trips.
Ride-hailing boda boda operators late last year petitioned Parliament for lowering of the commission, citing the increased operational costs that have squeezed their earnings.
But Uber, the market leader in the local ride-hailing transport sector with at least 20,000 operators (both cars and boda bodas), says the cap is negatively affecting revenues, in what is seen as a silent push to have the government increase them.
“The application of a commission cap negatively affects a company’s ability to generate revenue and fulfil its commitments to users.
“Restrictions in the current regulations—specifically the commission caps, can stifle competition,” Uber said in its submissions.“
“Regulating the commission and making it the same for all platforms eliminates one of the main ways platforms can compete to attract drivers.”
Uber only caps commissions at 25 percent of the value of the trip in Portugal and Tanzania. In Kenya, the cap is 18 percent.
The parliamentary committee has since given the Ministry of Roads and Infrastructure up to the end of April to come up with changes to the NTSA-backed pricing regulations.
“The reviewed regulations should address the issue of pricing formula and dispute resolution mechanisms,” says the committee in the report tabled in Parliament.
Ride-hailing in the boda boda sector has grown over the past few years, drawing thousands of drivers to the platforms of Uber, Yego, Bolt and other companies.
