Proposed Ride-Hailing Fare Hike May Push 60% of Nairobi Users to Alternatives, Survey Finds

A recent survey by the Trade and Investment Forum for Africa (TIFA) indicates that a planned hike in ride-hailing fares could lead to a significant drop in users in Nairobi, with 60% likely to switch to alternative transport options.

The proposal, advocated by the Organisation of Online Drivers (OOD), suggests increasing the minimum fare from around Sh220 to approximately Sh550, a 1.5 times multiplier. This move aims to address challenges faced by drivers, including declining earnings, rising fuel and maintenance costs, and platform commissions.

Impact on Commuters

The TIFA survey highlights that if implemented, 44% of affected passengers would shift to using matatus more frequently, while 7% would rely more on regular boda bodas. Other responses include 4% opting to walk more, 3% using personal vehicles, and 2% ceasing ride-hailing usage altogether.

Consumers expressed strong opposition to the minimum fare policy, with 59% deeming it inappropriate. Affordability remains a primary concern, as 36% believe fares should be market-driven and another 36% warn that the hike would make ride-hailing prohibitively expensive.

Economic Context and Usage Patterns

The study underscores the economic pressures Kenyan households face, noting that 81% of Nairobi households report rising living costs or reduced incomes. Additionally, 92% of consumers are concerned about increasing prices.

Ride-hailing services are predominantly used for essential trips, such as commuting to work or school, business errands, shopping, and emergencies, accounting for 72% of trips. On average, passengers take about 6.8 ride-hailing trips monthly.

Industry Significance

Despite affordability challenges, the ride-hailing sector supports livelihoods for many. Estimates suggest between 300,000 and 350,000 active drivers in Kenya, with over half depending on ride-hailing as their main income source. Annual earnings from the sector range between Sh126 billion and Sh147 billion, benefiting up to 1.75 million household members directly or indirectly.

The survey also found that 18% of users would maintain their ride-hailing habits despite fare increases, while 22% would reduce usage or seek cheaper alternatives.