Safaricom-backed taxi hailing app Little Ride has sparked another vicious price war with archrival Uber by slashing fares by a third to set the lowest cab tariffs in the Kenyan market.
The new prices take effect Friday in both Nairobi and Mombasa and will see Little Ride charge Sh30 per kilometre down from Sh55, and left time charges at Sh4 per minute — with no flat base charge or price surges.
American giant Uber in July cut fares in Nairobi by a third, reducing the app’s per kilometre cost to Sh35 from Sh60, and lowered per minute transit charges by Sh1 to Sh3, but left base charge intact at Sh100.
Little Ride, developed by local IT firm Craft Silicon, is banking on the new prices to grow market share and overtake Uber in race for customers.
“Little will be reducing the price to Sh30 per km from this Friday,” Kamal Budhabhatti, founder of Craft Silicon, told the Business Daily.
“We were the most expensive in the market. And our riders wanted us to be same price as other players in market.”
The Little Ride-Uber duel is shaping up to be like the San Francisco firm’s long-drawn-out price war with Didi Chuxing in China, which ended in August in a deal that saw the Beijing-based startup acquire the American giant.
Using the above rates and assuming all factors constant, a journey from Ole Sereni Hotel to Nation Centre (6.87km, 37.3 minutes) would cost Sh355 on Little Ride and Sh450 on Uber.
This implies Uber in Nairobi is 27 per cent more expensive than Safaricom’s taxi hailing app.
Little Ride launched in Nairobi in July and presently records about 3,500 journeys daily from its pool of 1,600 active drivers, and is ranked the second biggest e-haling app in Kenya.
Uber has signed up more than 1,000 drivers and clocks about 10,000 trips a day. Uber has a ‘surge’ function — where it increases rates by a multiple, say 1.5 times, in the event that demand cannot be met by the number of cabs in service.
Taxify, an Estonian taxi startup, was first to react when in mid-August it lowered prices by nearly a fifth to charge Sh40 per kilometre, down from Sh50, Sh4 per minute from Sh5, while the base fare remained unchanged at Sh100.
Dubai-based e-hailing firm Mondo Ride followed in September by slashing prices by a fifth to Sh45 per kilometre and Sh3 per minute in addition to a base fare of Sh100 which remained unmoved.
Previously, Mondo Ride charged Sh58 per kilometre and Sh4 for every minute spent in the journey, plus Sh100 base fee.
The first round of the taxi price war was sparked by Little Cab at its launch in July, when it took off Sh55 per kilometre and Sh4 per minute at a time when Uber was priced at Sh60 for every kilometre covered and Sh4 per minute, in addition to a base fare of Sh100.