In a major setback for the popular taxi-hailing company, Bolt, the Kenyan National Transport and Safety Authority (NTSA) has rejected the company’s application for a license renewal. The decision comes in the wake of alleged violations, including illegal commission charges and booking fees.
A recent exchange of correspondence between NTSA’s Deputy Director and Head of Licensing, Cosmas Ngeso, and Bolt Kenya Country Manager, Linda Ndungu, reveals the forthcoming action. The Deputy Director said unless Bolt addresses the alleged breaches to the satisfaction of the NTSA, the company faces the imminent loss of its transport network company operator license by the end of the month.
“Please note that the Authority is not able to proceed with renewal of your operator license until the issues raised by drivers and their representatives are satisfactorily addressed and rectified,” said Mr Ngeso in the letter to Bolt on behalf of NTSA director-general George Njao.
Bolt’s license granted in October last year nears expiry in 17 days
Bolt’s operating license in Kenya is set to expire in 17 days. The current license was issued on October 28, 2022. While the company currently has a license in the market and continues to work with the regulator in the stipulated license renewal process, the NTSA, however, won’t issue a new license unless the app company provides a concrete plan to address the breaches.
The NTSA has alleged that Bolt violated the 2022 Transportation Network Companies (TNC) Regulations, particularly concerning commission charges and an unauthorized booking fee. These regulations expressly forbid taxi-hailing apps from imposing any charges on customers except for the commission.
In response, Ms Ndungu stated via email to Business Daily, “Bolt imposes a fixed percentage booking fee on passengers. This fee helps cover the costs of customer support and improved technological features, contributing to a more efficient service on our platform.”
Ms Ndungu also said that the company has been operating as a “fully compliant operator” as per the regulations and is working on the renewal process ahead of the expiry.
Bolt is facing regulatory scrutiny in Kenya
Bolt, the leading ride-hailing service operating in 16 Kenyan towns and spanning six African countries with 47 million customers and 900,000 drivers, faces regulatory scrutiny over its commission rates. Its main competitor, Uber, has expanded to additional Kenyan towns.
Regarding this, the regulator, NTSA, has demanded Bolt clarify its commission structure, cease alleged illegal booking fees, and ensure strict compliance with regulations limiting commissions to 18 per cent and prohibiting booking fees.
NTSA has informed Bolt of possessing “substantial evidence” of commission rates exceeding the 18 per cent limit and unauthorized booking fees.
The Estonia-based firm, which initially entered Kenya as Taxify in 2016, is racing against time to meet NTSA’s demands before its license expires on October 28. NTSA’s Cosmas Ngeso emphasized, “We will consider renewing your license once these issues are addressed, and we await your prompt response and compliance.”
Potential consequences of the ride-hailing cessation in Kenya
If Bolt were to cease operating in Kenya due to a license not being granted, several consequences could unfold. Service users would experience a reduction in affordable and convenient transportation options. Bolt has been a popular ride-hailing service in Kenya, providing an alternative to traditional taxis and public transportation. Without Bolt, the burden of transportation would fall more heavily on consumers.
Furthermore, the cessation of its operations would have an impact on employment. Many drivers rely on the platform as a source of income, and their livelihoods would be at risk. This could lead to job losses and economic instability for those dependent on the gig economy.
The absence of the e-ride company might also stifle competition in the ride-hailing industry in Kenya. Competition typically leads to improved services and lower prices for consumers. With one less player in the market, there might be less incentive for other ride-hailing companies to innovate and offer competitive rates.
Additionally, the government might miss out on potential revenue from licensing fees and taxes that the company would have contributed. Licensing ride-hailing services can be a source of income for local governments, and the absence of ride-hailing would mean less revenue.
Woes in Kenya
An unidentified Nigerian man in Kenya was reportedly beaten to a pulp by a mob after he physically assaulted a female Bolt driver in Kenya. This was reported on X (formerly Twitter) by a lady who identified herself as the driver’s daughter.
In July, Kenya connected the ride-hailing company’s app to the activities of a gang of two kidnappers in the country’s capital, Nairobi.
This followed e-hailing drivers in Nigeria accusing the company of being insensitive to their plight after its refusal to increase fares and accept a slash in commission following a fuel subsidy removal which saw an astronomical hike in fuel prices.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!