The Ministry of Roads and Transport has proposed new regulations that would introduce a minimum compensation per trip for drivers and riders operating on ride-hailing platforms, a move that could significantly increase passenger fares and has drawn opposition from industry players.
According to draft regulations, the government wants all transport network companies to guarantee drivers and motorcycle riders a minimum payment for every completed trip, regardless of distance, travel time, promotional discounts or surge pricing.
Official correspondence shows that the ministry has begun the process of finalising and gazetting the proposed National Transport and Safety Authority (Transport Network Company, Owners, Drivers and Passengers) (Amendment) Regulations, 2026.
In a letter dated June 30, 2026, Principal Secretary for Transport Paul King’ori asked the 18 licensed ride-hailing platforms to submit their views on the proposed regulations by July 6 as part of the public participation process.
“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,” King’ori said.
However, industry players say they declined to participate because the government did not disclose the proposed minimum compensation rates.
Executives from several ride-hailing companies argued that introducing a mandatory minimum fare without prior consultation could reduce demand by making taxi services unaffordable for many passengers.
Industry sources estimate that the proposed minimum compensation could raise the current base fare from about Sh220 to between Sh400 and Sh500 per trip, although the government has not officially confirmed the figures.
One executive said the proposal risks hurting both passengers and drivers by reducing the number of trips booked.
“The minimum compensation model being proposed is flawed. It could significantly reduce demand because many passengers may not afford the higher fares, ultimately affecting drivers’ earnings,” the executive said.
The draft regulations seen by industry stakeholders do not specify the actual minimum compensation rates, a move that has raised concerns among operators.
Transport Cabinet Secretary Davis Chirchir had not commented on the matter by the time of publication.
Under the proposed rules, ride-hailing companies will be prohibited from offering discounts or promotional fares that result in drivers earning below the prescribed minimum compensation.
“The prescribed minimum trip compensation shall apply irrespective of distance, duration, dynamic pricing, promotional discounts or any other pricing mechanism,” the draft regulations state.
The regulations further provide that the minimum compensation for drivers will vary depending on the engine capacity of the vehicle or motorcycle. Vehicles with engine capacities of between 501cc and 1,500cc will have a different compensation rate from those above 1,500cc.
Kenya’s ride-hailing industry has expanded rapidly since 2014, driven by increased smartphone usage and growing demand for digital transport services in major towns and cities.
According to the Ministry of Roads and Transport, about 35,000 drivers are currently registered on ride-hailing platforms, with many operating on multiple applications. Together, they complete an estimated 175,000 trips every day across the country.
The proposed regulations form part of a broader government plan to introduce a national pricing framework for both conventional taxis and app-based transport services.
The ministry says the new framework will review operating costs to determine minimum viable fares and establish a pricing structure covering base fares, distance charges, time-based rates, minimum fares and applicable surcharges.
According to the ministry, the absence of a national pricing policy has led to intense price competition among ride-hailing companies, resulting in low driver earnings that often fail to cover operating costs such as fuel, insurance, maintenance and vehicle depreciation.
The latest proposals build on the Transport Network Companies, Owners, Drivers and Passengers Regulations, 2022, which capped commissions charged by ride-hailing companies at 18 percent following complaints from drivers and vehicle owners.
However, disputes between drivers, owners and ride-hailing platforms have persisted, with differing interpretations of the commission cap and continued concerns over driver earnings.
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