American online taxi hailing company Uber has slashed its charges in Mombasa just days after Safaricom-backed rival, Little, announced its entry into the coastal city.
The new charges that took effect Thursday will see the San Francisco-based e-hailing firm charge riders Sh35 per kilometre down from Sh50.
The firm has also reduced its charges per minute by Sh2 to Sh3 and cut the pricing of short rides by Sh100 to Sh150. Base fare and cancellation fees were also cut by Sh30 to Sh50 and Sh200 to Sh150, respectively.
The new rates come three months after the firm slashed Nairobi prices by a third. The firm cut the app’s per-kilometre cost to Sh35 from Sh60, and lowered per minute transit charges by Sh1 to Sh3, but left the minimum charge intact at Sh100.
“We want to make sure that Uber is one of the most affordable ways to get around. With reduced fares, we believe Uber can now be a true alternative to people driving their own cars into the city centre, with all the hassle and cost that parking brings,” said Uber in a statement.
The new rates are set to rival Little’s which has positioned itself as a cheaper option. The firm charges passengers Sh55 per kilometre and Sh4 per minute — with no flat base charge or price surges. Uber applies price surges, where it hikes rates by a multiple, say 1.5 times, in the event of high demand.
Uber launched its services in Mombasa, Kenya’s tourism hub, in March this year. The new prices also come just in time for the Christmas holiday when the town experiences an influx of local and international travellers who are likely to use the service.
Uber is regarded as Kenya’s biggest taxi online hailing firm with more than 1,000 drivers recording about 10,000 journeys every day.
Pewin cab’s Dandia app, unveiled last month, also plans to make an entry into the coastal town. The firm expects to intensify price wars in the e-hailing space with its fixed zonal charges.
Dandia e-hailing application has set specific charges between destinations, unlike rivals Uber, Mondo Ride and Taxify which only indicate a price estimate at the beginning of a trip.
State-owned Kenya National Taxi Corporation is piloting an app in Nairobi to challenge Uber’s dominance and take a bite of the retail cab market. The e-hailing service is available in Nairobi and will by year end be unveiled in Mombasa and Kisumu.
The online taxi hailing apps have an attractive pricing model where every trip is automatically and openly costed, helping users to budget for their travel expenses unlike regular cab drivers who quote their prices based on arbitrary spot negotiations with clients.