Uber has found itself in a pickle over a move it made last week to stay competitive against a backdrop of increasing competition from locally spawn taxi-hailing services. Particularly with the entry of LittleCabs bankrolled by one of the most profitable companies in sub-Saharan Africa, Safaricom.
Being a locally spawn product and bankrolled by a powerful local company, LittleCabs entrance into the market was anticipated to disrupt the taxi-hailing service business. In reaction to the growing local competition, Uber counter response was to wage a price war, by cutting down its fair prices by up to 35%. The fare dropped from Ksh.60 to Ksh.35 per kilometer.
Though, the company denies cutting down prices to create a barrier of entry into the market for the startup companies venturing into that market. The price cuts intended to maintain and attract more customers to Uber services, while at the same time make it extra difficult for startup companies entering the market. Also meant that taxi drivers signed up under Uber taxi services, were taking less money back home at the end of the days.
Thus, Uber taxi drivers staged …read more