Reports out of Tanzania reveals that popular quick-ride company, Bolt, may be on its way out of the east-African country. The uncertainty around Bolt’s operation in Tanzania is with respect to the recent 15% service fee order. The two major ride companies in the country are Bolt and Uber and this fee affects them. According to Bold, it is already making contact with relevant stakeholders. Bolt East Africa regional manager, Kenneth Micah said
“Bolt has requested a meeting with the relevant stakeholders to further discuss this particular matter with the hope of reaching favourable tariff and commission regulations, even as we continue to seek and explore alternative lobbying options provided within the legal framework including Latra regulatory framework,”
Latra is the Land Transport Regulatory Authority which regulates taxi services in Tanzania. The authority is in charge of setting fares and reviews of pre-existing fares. According to Bolt, it will have to discontinue its car business if the situation remains the same. If Bolts switches of its car category, then the market will have small companies like Little and Ping. Presently, Little charges 15% while Bolt and Uber charge 20% and 25% respectively.
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“While we acknowledge and appreciate Latra’s mandate, we strongly believe that the introduction of control tariffs in a well-functioning and competitive ride-hailing sector is detrimental to a free market economy. Nevertheless, Bolt will implement the directive under duress and for an interim period,” said Micah.
“We are complying temporarily to demonstrate goodwill and our commitment to engage with Latra for more favorable regulations that enable further investment. We are cognizant of the fact that should Latra maintain the status quo. The market will eventually cease to be viable for Bolt, and this will necessitate turning off our car category.”
Uber temporaily suspends its operations in Tanzania
Although Bolt is still trying to make a decision, Uber already suspended its operation in the country last week. However, the company claims that it will resume operation if there are favourable changes.
According to Bolt, over 10,000 drivers will have to look for new jobs if it switches off its service. Bolt operates in seven markets in African including Nigeria, Kenya, South Africa, Uganda, and Ghana.
Just last month, Latra had a review of the rates for ride companies. The againcy also did some adjustments to the maximum distance (per kilometer) rate and commission. Latra wants all car ride companies to reduce their “dead kilometers”. This means reducing the distance that the driver will cover before picking up a passenger. The agency also wants a platform where drivers can be “heard” when a passenger has a complaint. Due to increasing fuel costs, the agency doubles the per-kilometer rate for ride-hailing companies.