A majority of Nairobi’s ride-hailing users oppose the government’s proposal to introduce minimum fares for digital taxi services, with most preferring market-driven prices rather than government regulation, according to a new TIFA survey.
The poll, which surveyed 733 Nairobi residents, found that 63 percent of ride-hailing users want fares on platforms such as Uber, Bolt, Little Cab and Faras to be determined by market competition, while 33 percent favor government-regulated pricing.
TIFA said the preference for market-based pricing was consistent across age groups and gender, indicating broad consumer support for competition in the ride-hailing sector.
“A clear majority (63%) believe fares should be determined by market competition, not government regulation,” TIFA stated in the survey report published on August 20.
Nairobi Users Reject Proposed Minimum Fare
The survey also found that public awareness of the proposed policy remains relatively low, with only 27 percent of respondents saying they were aware of plans to introduce minimum fares before taking part in the poll.
According to the report, 73 percent said they had not heard about the proposal.
However, after being informed about the planned policy, 59 percent said they opposed it, compared with 39 percent who supported the introduction of minimum fares.
TIFA attributed the opposition largely to concerns that regulated minimum fares would increase transport costs and make digital taxi services less affordable.
“A clear majority (59%) oppose the proposed minimum fare policy, reflecting concerns about affordability rather than opposition to improving driver welfare,” the survey report stated.
Among those opposed, 36 percent said fares should continue to be determined by market forces, while another 36 percent cited the likelihood of higher ride costs.
Those supporting the proposal mainly cited the likelihood of higher and more predictable earnings for drivers.
Higher Fares Could Push Users to Matatus
The survey also found that consumers could reduce their use of ride-hailing services if fares rise.
Six in 10 users, or 60 percent, said they would switch to alternative forms of transport if ride-hailing fares increased significantly.
Among those who would switch, 44 percent said they would use matatus more frequently, while seven per cent would turn to boda bodas. Another four per cent said they would walk more often, while three per cent would rely more on private vehicles.
Only 18 percent said they would continue using ride-hailing services as usual following a significant increase in fares.
A further 11 percent said they would use the services less frequently, while another 11 percent would seek cheaper ride-hailing options.
The findings point to a potentially significant impact on demand if minimum fares substantially increase passenger costs.
Ride-Hailing Services Embedded in Daily Life
The survey also highlights the extent to which digital taxi services have become part of everyday life in Nairobi.
About 72 percent of ride-hailing users said they rely on the services for essential activities, including commuting to work or school, business trips, shopping, errands and emergencies.
The average user makes approximately 6.8 ride-hailing trips per month, according to TIFA.
The survey further found that 81 percent of respondents are experiencing either rising living costs or constrained incomes, making affordability a major consideration when choosing transport.
Among respondents who were already aware of the proposed minimum-fare policy, 57 percent expected it to increase passenger costs and financial pressure.
Another 17 percent said the policy could push commuters towards alternative forms of transport and reduce demand for ride-hailing services.
Government Moves to Set Minimum Driver Pay
The TIFA findings come as the government works on new regulations for transport network companies, including rules governing drivers, passengers and digital taxi operators.
The process follows a directive by President William Ruto on May 22, after ride-hailing drivers raised concerns about declining earnings.
Ruto directed the Ministry of Roads and Transport and the National Transport and Safety Authority (NTSA) to fast-track regulations governing digital taxi platforms, including the introduction of a minimum fare.
“I have instructed the ministry to work with stakeholders to make sure those regulations are implemented so that we can streamline the whole digital taxi platform,” Ruto said during a meeting with stakeholders in Mombasa.
In a letter dated July 6, Principal Secretary for Transport Mohamed Daghar asked ride-hailing companies to submit proposals on fair minimum compensation for drivers.
The submissions were intended to inform the proposed National Transport and Safety Authority (Transport Network Company, Owners, Drivers and Passengers) (Amendment) Regulations, which were undergoing public participation.
Under the proposed framework, ride-hailing companies would be required to compensate drivers based on a government-approved minimum fare.
Industry discussions have previously considered minimum fares of between KSh400 and KSh500, compared with entry-level fares of about KSh220 on some platforms. However, the government has not announced a final minimum fare.
The ministry had invited stakeholders and members of the public to submit views on the draft regulations by July 30, after which the government would consider the feedback before deciding whether to gazette and implement the proposed rules.
TIFA said the findings show how difficult it is for regulators the balance the interests of drivers and passengers.
While higher minimum fares could improve driver earnings, a substantial increase in passenger costs could encourage users to abandon ride-hailing services in favour of cheaper alternatives.
The survey suggests that any policy aimed at improving driver welfare must consider the potential impact on demand and affordability.
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