Barely a year after Tanzania capped the commissions that e-hailing companies like Uber and Bolt charge their partners to 15%, the authority in charge has backed down from the order, wiping out prospects for increased profits for drivers.
The rate was increased to 25% effective last Sunday after the land and transport regulation authority (Latra) issued a notice on December 30, which replaced the initial instruction from March last year. Latra sets and approves fares for all operators, including those in the ride-sharing sector.
Uber and its main rival in Europe and Africa, Bolt, halted some of their services in April last year on the grounds that cutting partner commission would hurt their profits. However, the reduced fee meant higher income for drivers, who in the past, like their counterparts in Kenya, have protested low profits from the apps.
Uber resumes full operations in Tanzania
Uber, which halted UberX, UberXL and UberSave services in April, began efforts to resume full operations on Monday, TechCrunch has learned, joining Bolt, whose services were restored in October. Uber charged 25% commission while Bolt charged 20%. His withdrawal left the market in the hands of local brands like Little, which charges a 15% commission, and Ping.
“We made the difficult decision to pause our operations in Tanzania because the regulatory changes that were introduced created an environment in which it was difficult for our business to operate. Since the pause, we have maintained our commitments to LATRA and other regulatory bodies in Tanzania as a sign of our commitment to resuming full operations in the market, giving drivers a way to win and passengers an enhanced mobility option,” he said. Uber. head of communications for East and West Africa, said Lorraine Onduru.
“We welcome the new pricing order issued by the Land and Transport Regulatory Authority which we believe will contribute significantly to the growth and development of the rideshare industry in Tanzania,” said Onduru.
The resumption of e-hailing services comes after stakeholders, including Uber and Bolt representatives, pushed for the fees to be revised; prompting Tanzania to announce last September that a middle ground had been found and that the companies would resume operations.
“Our efforts and commitments were aimed at ensuring a conducive regulatory environment for mobility services in Tanzania among drivers, vehicle owners, passengers and transport operators. The overall goal was to develop the nascent ride-sharing sector in the market,” a Bolt spokesperson said, adding that the company restored all its services on October 13, 2022.
Bolt said that after LATRA’s decision, he will introduce some changes in the price of passenger fares soon.
Aside from Tanzania, Kenya also capped the commission at 18% last year, after new regulations came into force. Efforts by rideshare operators to have the new regulations removed have so far been unsuccessful.
