What you need to know:
- A rising number of drivers who use digital taxi-hailing platforms are choosing to operate offline, essentially switching back to the old ways of doing business
Dar es Salaam. The advent of digital taxis in 2016 was a breath of fresh air to many residents of the commercial capital Dar es Salaam because it saved them from the agony of overpriced fares.
They brought convenience to the rider’s doorstep in real time, with disciplined drivers who were vetted and put the interest of their passengers first.
However, with changing times especially in the wake of spiraling operational costs, a number of drivers under digital taxi-hailing platforms are opting to go offline as they switch back to traditional business models.
In Tanzania, digital taxi riding platforms including Uber [which, however, has suspended operations in Tanzania] and Bolt are yet to adjust their rates despite squeezed earnings for the drivers that form a larger chunk of the gig economy.
In the wake of the Russia invasion of Ukraine, fuel prices shot through the roof with a litre of petrol in June trading for Sh2,994 in Dar es Salaam, even with state subsidies.
Multiple interviews with drivers revealed that a number of colleagues now prefer to operate under the traditional taxi model, only using the apps to get clients, then cancelling the trip to negotiate rates with their clients directly.
The Citizen’s survey in the past two months revealed that the drivers switch off the application immediately the client boards sometimes negotiating new rates or accepting the charges because in the process they avoid paying commissions to boost their earnings.
“Offline takes away the commission part of it. The only expense that I have to incur during that trip is the cost of fuel which as you know is on the higher end now even with the recent government interventions,” adds Ahmed who operates a bolt app.
Janet, one of the few female drivers joined digital taxi business as full time job in June 2020 after she was laid off at her work place following the outbreak of the Covid-19 pandemic which was first reported in the country on March 18, 2020.
“I think it was some wrong timing on my part, but I did not have many alternatives at the time, to be sincere, it has not been good as I expected. The clients are there but the rates are extremly low,” says Janet a mother of two, who introduced herself with just one name.
But that was at a time when fuel prices had dropped to a record Sh1,500 low due to Covid-19 pandemic that impacted negatively on the global oil inudstry, but which has now changed to hit new record highs.
Drivers also say their crisis has worsened by the regulatory authorities that have kept a deaf ear to some of their demands for better rates.
They say the application owners have not factored in the engine size of cars which are all charged at a flat rate despite different consumption levels.
“Cars with fuel consumption at 650cc charge the same price with 1300cc cars,” says Richrad.
Several passengers interviewed by The Citizen admitted to have participated in the scheme several times after the drivers reportedly explained to them why they had chosen to take that route. “Yeah, at first I did not understand why he was asking me to switch off the application, but when he explained that this would boost his earnings given the rising costs of fuel, I agreed with his arrangement,” says Alice, a resident of Sinza.
But even then, there are some who say this could in the long run compromise their security given past incidences when some unscrupulous drivers allegedly harassed female passengers in Dar es Salaam.
“It depends with the distance and the time of day I’m requesting for the ride. If I’m going to a place that is far, I do not accept to ride offline. As well, if I’m having a night trip I prefer being online throughout the entire journey because I have a habit of sharing my ride information with friends via WhatsApp so they can track my location and where I’m going,” says Lucy Tomeka, a regular user of digital taxis.
Uber closes shop
In April, US ride-hailing giant Uber suspended its services in Tanzania, saying government legislation that raises fares and cuts its commission made it difficult for it to operate.
Uber said it made the “difficult decision to pause operations” in Tanzania.
“The pricing order proposed by the Land Transport Regulatory Authority (Latra) makes it challenging for platforms like Uber to continue to operate,” Uber said in a statement then.
Under the new regulations which came into effect that month fares doubled to Sh900 per kilometre whereas maximum commission for the ride-hailing companies was set at 15 percent from the previous 33 percent.