Little Cabs, a product by Craft Silicon in partnership with Safaricom, was launched early this month and one thing it promised was to wage price wars with the global number one taxi ailing service, Uber; and, even before Little Cabs could be in the market for a month, UberX Nairobi has already lowered its pricing by up to 35%.
The lowered prices have targeted the price per minute, price per kilometer, and the minimum fare. Initially, the price per minute was charged at Kshs 4 which has since been adjusted to Kshs 3. The price per kilometer has also seen a significant reduction from Kshs 60 per kilometer to a new rate of Kshs 35 per Kilometer. What this means is that if it took 30 minutes to travel a 10 Kilometer journey, UberX Nairobi charged around Kshs 820, a journey that will now cost about Kshs 440.
To put the price differences in perspective, UberX Nairobi has compared the old vs new prices between KICC to Nyayo Stadium, Times Tower to UoN Gigiri, and State House to JKIA. At the initial pricing, KICC to Nyayo Stadium averaged at Kshs 300 but starting today that trip will cost only Kshs 200. Times Tower to UoN Gigiri averaged at Kshs 800 but after the price reduction the trip will only cost Kshs 500, and finally the trip between State House and JKIA has been reduced from Kshs 1,300 to Kshs 850.
Little Cabs pushed for the price reduction when they announced that as opposed to Uber, they will not be charging base fare. Also, instead of Little Cabs charging Kshs 60 per kilometer that UberX Nairobi charged, their pricing was set at Kshs 55 per kilometer. This meant that for a 10 kilometer trip that lasted 30 minutes, Little Cabs charged around Kshs 670 whereas UberX Nairobi charged around Kshs 820. With the new UberX Nairobi pricing however, it will be Kshs 230 cheaper to travel using Uberx Nairobi compared to traveling on Little Cabs.
The news of the price reduction has already been received by applause by the many UberX Nairobi users, but what’s not clear is whether the price reduction affects both Uber and the drivers or Uber alone. If the price reduction affects both Uber and drivers, then it is very likely the drivers will not applaud the price reduction as their daily income from Uber will most likely fall. However more and more Nairobians may now opt to travel around Nairobi using Uber services and this way the drivers may find themselves making more money than they used to.