Less than a year after announcing the decision, the Tanzanian government changed its 15% fee cap on e-hailing services like Uber and Bolt, denying drivers the opportunity to earn more.
The Land and Transport Regulatory Authority (LATRA) declared the charge would rise from 20% to 25% as of last Sunday, January 15, in a notice that was issued on December 30, 2022. The prior directive, which had been modified, had been issued in March last year. LATRA is now in charge of setting and approving the pricing for the whole ridesharing sector.
Paused Services
Uber and Bolt, its main rivals in Europe and Africa, stopped a number of services in April last year on the grounds that cutting the commission for partners would lower their income. Drivers’ earnings increased as a result of the fee reduction (from 25% to 15% commission fee), despite the fact that they had previously complained about the apps’ insufficient revenues, similar to their Kenyan counterparts.
After a brief hiatus, Uber is once again operational in Tanzania.
TechCrunch has learned that as of Monday, January 16, Uber has started making efforts to resume full operations after temporarily suspending UberX, UberXL, and UberSave services in April 2022. Bolt’s services were resumed in October 2022. This comes after that.
Uber charged a 25% commission fee, compared to 20% for Bolt.
Domestic rivals Little (15 percent commission) and Ping entered the market in their place.
Uber’s head of communications for East and West Africa, Lorraine Onduru, said the company had to make the difficult decision to stop operating in Tanzania. The new rules apparently made it impossible for their company to operate in the area.
In order to demonstrate our commitment to resuming full operations in the market and giving drivers a way to make money and passengers a better mobility alternative, we have maintained our discussions with LATRA and other regulatory agencies in Tanzania since the suspension.
Onduru also stated that they support the new price order issued by LATRA and believe it will significantly aid in the expansion and development of Tanzania’s ride-hailing industry.
Service Restoration
Stakeholders pushed for a reconsideration of the rates, including representatives of Uber and Bolt. Tanzania said in September last year that a settlement had been reached and the businesses would resume operations, enabling the resumption of the e-hailing services.
The primary objective, according to a Bolt spokesman, was to grow the market for the newly burgeoning ride-hailing sector. “Our efforts and discussions were directed at establishing an enabling regulatory framework for mobility services in Tanzania among drivers, vehicle owners, passengers, and ride-hailing firms,” the statement continued.
As of October 13, 2022, the firm is back in full operation.
In response to LATRA’s decision, Bolt has stated that it will soon implement new pricing for passenger fares.
The commission was capped at 18% when new legislation went into effect in Kenya and Tanzania last year. The ride-hailing sector has not yet been successful in getting the new limits lifted.
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