How Kenya can spur ride-hailing industry’s growth – Business Daily
Ride-hailing as an industry has revolutionised how we move around our cities, introducing reliability, safety and convenience for consumers; and for drivers, an earning opportunity in which they can set the pace of their work and essentially be their own boss.
However, only a fraction of Kenyans use ride-hailing on a daily basis, an indication of the massive potential that yet remains to be realised.
The Ministry of Transport, Infrastructure, Housing, Urban Development and Public Works gazetted regulations for the ride-hailing industry. This is a commendable step aimed at introducing frameworks to position the ride-hailing marketplace for growth including the drivers who earn an income from it.
While there are benefits to progressive regulations, it’s worth taking a step back to review the broader impacts of the regulations, particularly the 18 percent commission cap.
According to a study by KPMG, the three main challenges with a commission cap are the potential dissuasion of foreign investment in the sector, an increase in trip fares thereby affecting rider demand and lower market profitability, which would affect the entry of new players into the industry.
As our country navigates the path to economic growth, it is imperative that we create opportunities for investment and the rebuilding of critical sectors and industries.
Progressive regulations could emanate in tens of thousands of new business opportunities being created to meet the ever-increasing public demand for safe, efficient and low-cost mobility options across Kenya.
To enable industry growth, a conducive and competitive environment for business is critical. In a healthy marketplace, drivers and riders would be free to choose the app best suited to their evolving needs.
In this scenario, drivers have earnings to take home after tending to their operating and financial expenses; riders find trips affordable to enable them to use the service repeatedly, and platforms are able to make a profit after catering to their operating costs.
A collaborative approach is important in substantively addressing the needs of platform workers, particularly by exploring the challenges in their immediate operating environment. What are the costs that they are faced with and how can the public and private sectors step in to provide relief?
Providing a platform where drivers can make substantial earnings has always been a priority for Uber, which regularly conducts in-depth reviews to ensure that the platform remains a viable economic opportunity for drivers, as well as an affordable option for riders.
In March and June of this year, Uber implemented increases on fares for trips, having looked into market pressures closely and gathering feedback from drivers and riders.
The current regulations stipulate the maintenance of certain records and their submission to the authorities upon their request. These include the name and relevant identification details of passengers such as date, time and location of pick-up and drop-off relating to the ride-hailing operator.
A successful private sector depends on a data governance framework that encourages innovation and better decision-making. As a country, we are already taking strides in the right direction with the recently introduced Kenya Data Protection regulations.
As we build other industries, it’s important to ensure that we maintain a data governance framework that guides the development of industry-enhancing policies.
The writer is head of East Africa, Uber