Uber Chap Chap, a product of the International digital tax platform Uber, is on its death bed months after it was launched in the Kenyan market.
The service which was introduced in early 2018, after a partnership with Suzuki Motor Corporation and Stanbic bank is reportedly struggling after owners failed to service bank loans.
In a notice published in a local newspaper on Thursday, Stanbic Bank is auctioning 13 Suzuki Altos to recover loans advanced by the owners.
Stanbic Bank recovery officer Lillian Wangechi, confirmed to a local daily that the vehicles belonged to Uber drivers who were unable to service their loans.
The officer divulged that the vehicles with manufacture years of 2017 and 2018 were purchased late last year and others early this year.
“The bank is only trying to recover its money. The bank has set a committee to discuss on car prices after closing offer date on April 4th,” Wangechi said.
The owners are reportedly struggling in the business for reasons linked to a poorly formulated business model.
The cars are to be sold at a subsidized cost of Sh835,000.
The Uber Chap Chap mode of operation is said to be oppressive and extortionate leaving the owners with little to service accumulating loans.
A ride on the Suzuki Alto starts at Sh16 per kilometre, Sh4 per minute with a minimum fare of Sh100.
According to critics, the ‘toys’ are not allowed to operate on another digital taxi platform, their services are also limited to a radius of 10 kilometers from and within the Central Business District (CBD).
When Uber Prices are compared to other known Uber services – UberX and UberSelect – their prices are relatively lower, translating to little income from the business.
After a tedious day on the roads, with the peanuts pocketed, the drivers are expected to remit 25% of their earnings to Uber as a commission.
Nevertheless, the car is said to be limited to strictly good roads limiting its operation.
Critics claim, despite the 800cc Suzuki Alto, with a consumption rate of 25 kilometres per litre, operational costs purported to be relatively low, the business is still not viable especially when viewed from the perspective of the owners of the cars.
Recently, Uber Chap Chap drivers have been linked to fraud cases. Which many critics have linked to daily frustrations.
According to an exposé done by a local daily, the Uber drivers have been charging their customers with the more expensive UberX rates.
The drivers have further been exposed for allegedly altering their classification in the Uber system from Chap Chap to UberX service, which is categorized in the premium rate.