Is Uber exploiting its Kenyan drivers? 

 

Uber’s price structures, globally, are complex and opaque. They have no fewer than six constituent parts: the city you’re in; the type of car you’re in; the base fare; the amount per minute; the amount per kilometre; and any surge multiplier that might be in effect. And the way those parts combine to form the total fare is far from consistent, varying wildly from city to city.

Consider Uber Black in Moscow. The time charge is $0.40 per minute, the same as an uberX (a cheaper option) in New York. But the Moscow car will cost you only $0.33 per mile, compared to $2.15 per mile for the New York car. In Lagos, an Uber driver needs to drive a passenger for 16 minutes to get the same amount of money he’d get by driving the same passenger a single extra mile. It takes a driver in Turkey 11.5 minutes to get the same amount of money as an extra mile and, in most cities, the figure reduces to about 6 minutes.

Comparisons are, therefore, not straightforward when you account for different base rates and amount earned for time spent waiting for a customer or per minute. It’s not clear how Uber accounts for the vast differences in pricing between cities but to some degree, fares are anchored by local taxi fares, cost of labour, cost of vehicles, regional wealth and living costs. Taking the cost per km in isolation, the fare reduction ranks Nairobi’s rate among the lowest among 400 cities in which the company operates. Uber Nairobi’s new fare of $0.35 is higher than those in several cities including Jakarta, ($0.23) Lagos (0.34), Bangkok ($0.32), Cairo ($0.29) amongst others, but significantly less than in wealthier cities such as Tokyo ($2.56). However, only accounting for fare per km may be misleading, Berlin, for example, has a set rate higher than Nairobi at $0.64 but a base fare of zero, no minimum fare, no cancellation fee, and no charge at all for time. Therefore, a driver stuck in traffic for an hour but only going one mile would earn less than a dollar whereas his counterpart in Kenya would earn close to $5 for the same trip. Drivers in Kenya are also pushing to keep a higher percentage of their earnings, but the 25 percent deduction fee is, however, standard practice in most cities except when promotions are being offered to attract customers.

Source: Is Uber’s fare reduction selectively exploiting its Kenyan drivers? – Ventures Africa