Uber Kenya Taxi Wars.

The Taxi Business

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Conventionally taxi business in Kenya has been on a gradual demand. Using a cab for instance is faster, efficient and a bit comfy compared to the phenomenal crowded Matatu means of transport.

Few government and or other relevant authorities registrations for compliance, with a good vehicle one is good to hit the road running with the taxi business. That’s how its been and especially at high traffic populous zones such as the Central Business District (CBD)

However other corporate players came in organised as fully fledged company outfits with vehicles, staff, drivers, offices and entire business system to offer taxi services at designated packages.

The hospitality industry too is a major player as far as such services are concerned. Hotels for instance provide courtesy cabs for their clients. In some instances they hire cab operators for such services either as individuals or as companies who help with picking and dropping clients for convenience.

All in all the taxi business in Kenya is operated for decades as a full-fledged independent sector offering services that are unique and customer focused. The Four P’s (Pricing Product Place Promotion) have thus been self defining within the busy sector.

Uber: The Business Model and The Kenyan Entrance

Uber is not in the taxi business, at least in the conventional sense, since it owns no cabs and has no cab drivers as employees. Instead, it plays the role of matchmaker, matching a driver/car with a customer looking for a ride and taking a slice of the fare for providing the service. Its value comes from the screening that it does of the drivers/cars (to ensure both safety and comfort), its pricing/payment system (where customers choose the level of service, ranging from a car to a SUV, are quoted a fare and pay Uber) and its convenience (where you can track the car that is coming to pick you up on your phone screen). The figure below captures the steps in the Uber business model, with comments on what it is that Uber offers at each stage and whether that offering is unique:

Uber business model

Surprisingly, their kenyan entrance has been met with objection from the established Taxi operators of the Nairobi Central Business District quoted at around 15,000 in number. Its been marred with Street demonstrations and attacks on Uber drivers meant to frustrate them out of business. Leaders have in response called for legal intervention to settle the scores and provide a balanced business ground for both investors and locals.

 

 

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