Game of prices,Uber and Little’s battle to dominate Nairobi
Little Ride, the taxing hailing app service by Safaricom and Craft Silicon becomes the cheapest taxi service in the Kenyan market after slashing fares by a third, causing yet another ruckus in what has become the new booming business in Kenya.
Nairobi is estimated to have more than 10, 000 taxis, doing an average of 4 trips a day, valuing the taxi business at Sh 20 million a day, this in addition to Nairobi being a tech hub is reason why the business is attracting entry of more players.
Little Ride, which changed its name from Little Cabs after a trademark feud, will now charge Sh30 per kilometre down from Sh 55, a rate per minute charge of Sh4 per minute and base fare of Sh100 meant to cater cancellations.
Little’s price slash comes a few months after the fare cuts from the San Francisco based firm, Uber and is banking on this to grow their market share.
Uber, Little’s main competitor, charges Sh 35 per kilometer and a rate per minute charge of Sh.3. Uber however has a base fare of Sh 100 and a surge function which increases the rates during peak hours and traffic snarl-ups.
Little Ride which has been operational since July records about 3,500 trips daily and is ranked the second biggest e-haling app in Kenya.
Little ride’s entry into the market with a charge Sh55 per kilometre and Sh4 per minute at a time when Uber was priced at Sh60 for every kilometre covered and Sh4 per minute, sparked the price war which from the look of things will not end any time soon.
Other e-hailing apps have not been left behind with Taxify, an Estonian based firm, lowering prices by nearly a fifth to charge Sh40 per kilometre, down from Sh50, Sh4 per minute from Sh5 while Dubai-based, Mondo Ride lowered its prices to Sh45 per kilometre and Sh3 per minute from Sh58 per kilometre and Sh4 rate per minute with both maintaining a base fare of Sh100.
Little ride recently launched its USSD platform allowing users without smartphones access affordable taxi services. This they believe will help them gain traction locally.
Little which has previously stated that it does not have the power to taken on Uber is however proving to be a force to reckon with. Aside from backing by Kenya’s largest telecom, Safaricom, the company offers various incentives to both customers and drivers, which seems to be increasing patronage.
Drivers get a 15% commission compared to Uber’s 25% and Mondo’s Sh50 per ride, free smartphones on signing up and free data bundles. Other than the relatively cheap prices, customers get to enjoy free Wi-Fi, live fare updates, scheduling option and the lady bug, a lady friendly category.
Even with the price slash, Little maintains that drivers will still get their fair share and better yet they will be reimbursed the difference in earnings that will result from the price change, Maureen Chege, Little’s head of Sales and Marketing.