There’s one thing Uber’s technology can’t replace

What you need to know:

  • It’s now common to see a man walk out of a restaurant, bypassing the taxis that are permanently parked around prime tourist spots like hotels, malls and restaurants.
  • While Uber operates only in Nairobi, a, similar service from Easy Taxi operates in Nairobi, Nakuru and Mombasa.

On Wednesday, the government agreed to engage in talks with Nairobi taxi owners who had threatened to go on strike if the government did not crack down on Uber, the taxi-hailing service.

The announcement came a few days after violence targeting some Uber drivers and their vehicles was reported. 

Uber has operated in Kenya for just over a year, and traditional taxis can see the new company taking their prime customers away.

It’s now common to see a man walk out of a restaurant, bypassing the taxis that are permanently parked around prime tourist spots like hotels, malls and restaurants. He looks at his phone and then jumps into a tiny Uber Toyota which pulls up at that very moment.

To be fair, taxi owners don’t actually mind competition. They have existed alongside “grey operator” taxis in Nairobi for years.

CASH-RICH UBER

Grey operators are vehicles that owners have lent to young men to operate as unmarked taxis in order to deliver steady weekly income from their idle cars. They are tolerated because they serve particular niches, such as corporate clients and services around residential estates.

Some people have asked why taxi operators don’t come up with their own app. Already, taxis in other cities have tried to come up with apps that imitate Uber, in London, New York and Chicago. Taxis in Vietnam, India, Philippines have also tried.

The truth, however, is that Uber is not just an app. Besides its low fares, Uber offers a secure payment option along with pre-determined fares, and estimated wait times. Other taxis only offer one of these three, that is, an immediate pick-up.

Uber, it should also be remembered, is losing money. A recent Forbes article showed that Uber’s fare billings in the first half of 2015 were $3.63 billion, from which they paid out $2.7 billion to their driver contractors. Their resultant revenue was $663 million, and they lost $987 million after heavy marketing and expansion costs.

Still, they had about $4 billion cash after some fundraising, and the company which is growing at 40 per cent a quarter, was valued at $50 billion.

LADIES-ONLY TAXI

The niche taxi business, for its part, continues to grow. While Uber operates only in Nairobi, a, similar service from Easy Taxi operates in Nairobi, Nakuru and Mombasa.

There are others like Smart Fellas that offers rides home for car owners worried about Alcoblow, and Mara Moja which offers a safe trusted driver that patrons can call on.

While there are no ladies-only taxi services in Kenya, there are now companies that accede to customer requests to provide lady drivers, mainly to ferry Muslim women passengers.

There will always be a place for the trusted cab in the neighbourhood, a driver one can call up to go and take a sick child to the hospital where a parent is, or pick someone up at 3 a.m. to catch a flight at the airport.

Uber has employed young men and women, some of whom were taxi operators before, and others who weren’t. By digitising an industry that has resisted metering and zoning, and getting their drivers into a formal digitised revenue share system, Uber may also be paying more taxes combined than the old taxis previously were.

Twitter: @bankelele