Reports from Tanzania reveal that the popular rapid transit company, Bolt, may be leaving the East African country. The uncertainty surrounding Bolt’s operations in Tanzania relates to the recent ordering of a 15% service charge. The two main transport companies in the country are Bolt and Uber and these fees affect them. According to Bold, he is already reaching out to relevant stakeholders. Bolt East Africa Regional Manager Kenneth Micah said
“Bolt has requested a meeting with relevant stakeholders to discuss this particular issue further in hopes of achieving favorable fee and commission regulation, although we continue to research and explore other lobbying options provided within the legal framework, including the Latra regulatory framework”,
Latra is the Land Transport Regulatory Authority which regulates taxi services in Tanzania. The authority is responsible for setting tariffs and reviewing pre-existing tariffs. According to Bolt, he will have to halt his automotive business if the situation remains the same. If Bolts changes car categories, then the market will have small companies like Little and Ping. Currently, Little charges 15% while Bolt and Uber charge 20% and 25% respectively.
“While we recognize and appreciate Latra’s mandate, we strongly believe that the introduction of control fares in a successful and competitive ridesharing industry is detrimental to a free market economy. Nonetheless, Bolt will enforce the directive under duress and for an interim period,” Micah said.
“We are temporarily complying to demonstrate our goodwill and commitment to engage with Latra for more favorable regulations that enable new investment. We are aware that Latra should maintain the status quo. The market will eventually cease to be viable for Bolt, and that will require deactivating our car category.
Uber temporarily suspends operations in Tanzania
Although Bolt is still trying to make a decision, Uber already suspended operations in the country last week. However, the company says it will resume operations if there are favorable changes.
According to Bolt, more than 10,000 drivers will have to seek new jobs if he stops his service. Bolt operates in seven African markets including Nigeria, Kenya, South Africa, Uganda and Ghana.
Last month, Latra reviewed the rates of transport companies. The authority also made some adjustments to the rate and the maximum distance commission (per kilometer). Latra wants all car transport companies to reduce their “dead kilometers”. This means reducing the distance the driver will travel before picking up a passenger. The agency also wants a platform where drivers can be “heard” when a passenger has a complaint. Due to rising fuel costs, the agency is doubling the rate per kilometer for ride-sharing companies.