Bolt the ride hailing app is considering ceasing operations in the Tanzanian market following a new 15% service fee directive by the Land Transport Regulatory Authority that went into effect Friday last week.
Uber on the other hand has reached out to relevant stakeholders, including the Land Transport Regulatory Authority (Latra), to re-negotiate the new terms. Latra, formed in 2020 to regulate taxi services in Tanzania, reviews and sets fare.
Bolt, charges its partners a 20% commission, however, said that it will switch off its car category should nothing change. This would leave the market to smaller players like Little, which charges a 15% commission, and Ping.
Uber, which charges a 25% commission, suspended its operations in the country last week over the same issue, but said it would resume business in the East African country if the terms became favorable.
“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 has implemented the directive under duress and for a limited interim period,” said Micah.
Bolt East Africa regional manager, Kenneth Micah, had this to say, “Bolt has requested a meeting with the relevant stakeholders to further discuss this particular matter with the hope of reaching favorable tariff and commission regulations, even as we continue to seek and explore alternative lobbying options provided within the legal framework including Latra regulatory framework. 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.”
Bolt, which has operations in seven markets in Africa, including Kenya, South Africa, Uganda, Ghana and Nigeria, said switching off its service in mainland Tanzania would affect more than 10,000 drivers.