The National Assembly Departmental Committee on Communication, Information and Innovation is considering proposed minimum fares for ride-hailing services, with Uber, Bolt and Faras warning that price controls could increase transport costs and reduce drivers’ earnings.
The companies told the committee, chaired by Dagoretti South MP John Kiarie, that mandatory minimum fares could have unintended consequences, including reduced passenger demand, fewer trips and lower incomes for drivers.
The firms argued that drivers’ earnings depend on more than the fare charged per trip. They said the number of trips completed, passenger demand, vehicle utilisation and operating costs also determine how much drivers take home.
“If fares rise and passenger demand falls, drivers may complete fewer trips and ultimately earn less,” the companies said in a joint memorandum submitted to the committee.
The ride-hailing companies urged Parliament to retain market-based pricing, warning that forcing fares upwards could push passengers towards less reliable and less efficient alternatives.
They said mandatory minimum prices could result in fewer passenger trips, reduced earning opportunities, lower affordability and market distortions.
The companies also warned that higher regulated fares could encourage more price negotiations outside digital platforms, potentially undermining the benefits of app-based ride-hailing services.
Kiarie said MPs would carefully assess the possible impact of the proposed changes before making recommendations.
“We must ensure that whatever regulatory framework we adopt protects consumers, supports drivers, and at the same time allows innovation to thrive,” Kiarie said.
Companies challenge 18 per cent service fee cap
The firms also challenged the existing 18 per cent ceiling on service fees that ride-hailing platforms can charge.
They argued that the cap limits their ability to invest in passenger promotions, driver incentives, safety technology, emergency response, customer support and new digital products.
The companies want the statutory ceiling removed and have proposed that platforms be allowed to compete through different commercial models, subject to transparency, competition and consumer protection requirements.
They warned that retaining the service-fee cap while introducing minimum fares would amount to regulation on both sides of the transaction.
“Government would effectively set the minimum fare a passenger pays while simultaneously limiting the maximum revenue a platform can receive for facilitating the trip,” the companies said.
The firms noted that Kenya has one of the lowest platform commission limits globally at 18 per cent, compared with a global average of about 25 per cent.
They argued that the lower cap could discourage substantial investment in the Kenyan ride-hailing market by both local and foreign investors.
The companies also asked Parliament to consider extending the duration of operating licences.
They said the current annual renewal requirement creates uncertainty for companies making long-term investments.
According to the firms, drivers also become concerned every September and October about whether platforms will secure licence renewals in November, given the potential impact on their livelihoods.
They proposed licences lasting between three and five years, subject to continued compliance with the law.
MPs, however, questioned whether five-year licences would give regulators sufficient flexibility to respond to rapid technological changes in the industry.
The committee suggested that an intermediate licensing period could provide businesses with greater certainty while maintaining regulatory oversight.
MPs raise concern over overlapping regulations
The companies further raised concerns about overlapping requirements imposed by national and county governments.
They argued that extending the transport network company framework to goods transport and two- and three-wheeled motorcycles could create duplication, particularly in areas where courier services are already regulated under existing communications laws and licensing frameworks.
The committee called for closer coordination between the Communications Authority of Kenya, the National Transport and Safety Authority and county governments.
Kiarie said Parliament would consider ways of creating a more coordinated regulatory framework.
“Businesses should not be left to navigate different and sometimes overlapping regulatory requirements without a clear coordination mechanism,” he said.
The ride-hailing firms maintained that drivers working through their platforms are independent contractors rather than employees.
They said drivers have the flexibility to choose when and where to work, whether to accept individual trips and whether to operate across competing platforms.
MPs welcomed the flexibility, noting that the industry had previously faced criticism over restrictions that prevented some drivers from working across multiple ride-hailing applications.
The companies, however, supported stronger safeguards around driver suspension and deactivation.
They proposed a distinction between temporary suspension over immediate safety concerns and permanent deactivation.
The firms also said drivers should, where appropriate, be given a reasonable opportunity to respond to allegations before permanent action is taken.
MPs demand answers on drivers’ earnings
Committee Vice-Chairman and Bomachoge Chache MP Alfah Miruka questioned whether drivers were satisfied with the platforms and how much they actually earn after meeting operating costs.
Drivers incur expenses including fuel, vehicle maintenance and insurance, which can significantly affect their net earnings.
“We need to establish what the driver takes home after meeting all these costs. The welfare of drivers is equally significant,” Miruka said.
Nandi Hills MP Bernard Kitur proposed that driver representatives from different parts of the country be invited to address the committee.
“Before Parliament decides on minimum fares or service fees, we should hear directly from the people who drive these vehicles every day,” Kitur said.
The move would allow lawmakers to hear directly from drivers before making decisions that could affect their incomes and working conditions.
The companies also defended the use of technology to improve passenger safety.
They cited driver and vehicle verification, GPS trip records, emergency response systems, identity verification and digital feedback as some of the measures used to improve safety.
An Uber official told MPs that ratings provided after every trip help identify service-quality concerns and improve operations.
The official said ride-hailing platforms combine technology with human support, including customer service teams and physical offices where customers can lodge complaints.
He said the industry had made significant progress since entering the Kenyan market, particularly in vehicle identification and verification.
The committee also questioned the companies about emerging technologies, including artificial intelligence, and whether they were keeping pace with rapid technological developments.
The firms told MPs that their technical teams were embracing emerging technologies to improve their services.
Kiarie also urged ride-hailing companies to increase opportunities for Kenyan professionals, particularly women, developers and technology innovators.
He called on multinational companies operating in Kenya to provide more opportunities for local talent to participate in developing technologies deployed in the country.
Kiarie cited M-Pesa as an example of a technology with a strong Kenyan and African development story despite Safaricom being associated with global telecommunications company Vodacom.
He challenged international ride-hailing firms to demonstrate how Kenyan developers and innovators could play a greater role in their operations.
The committee chairman also commended Faras for demonstrating that a Kenyan company can compete in the ride-hailing technology sector.
He urged Faras to ensure its branding communicates that its services are available to Kenyans from diverse regions.
The ride-hailing companies called for proportionate, evidence-based and technology-neutral regulations.
They warned that excessive regulation could discourage investment, reduce competition and slow innovation.
The firms proposed that an independent Regulatory Impact Assessment be conducted before any major pricing intervention is introduced.
The proposal received support from MPs, who said Parliament must consider the potential economic and consumer consequences of any changes to the sector.
The companies told the committee that ride-hailing platforms support tens of thousands of flexible earning opportunities while contributing to a wider ecosystem that includes vehicle financing, insurance, fuel, vehicle maintenance, digital payments, tourism and hospitality.
They urged Parliament to strike a balance between protecting passengers and drivers and preserving affordability, competition and innovation.
The committee directed the companies to submit revised memoranda addressing issues raised during the hearing.
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