In a significant setback for Bolt, a prominent taxi-hailing service, the Kenyan National Transport and Safety Authority (NTSA) has denied the company’s request for a license renewal. This decision comes in the wake of allegations of wrongdoing, including unlawful commission charges and booking fees.
A recent exchange of communications between Cosmas Ngeso, the Deputy Director and Head of Licensing at NTSA, and Linda Ndungu, the Country Manager for Bolt Kenya, sheds light on the impending action. The Deputy Director cautioned that unless Bolt effectively addresses the alleged breaches to the satisfaction of NTSA, the company could lose its operator license for a transport network company by the end of the month.
Mr. Ngeso, writing on behalf of NTSA director-general George Njao, conveyed in a letter to Bolt, “Please be aware that the Authority cannot proceed with the renewal of your operator license until the issues raised by drivers and their representatives are satisfactorily addressed and rectified.”
Bolt’s current operating license in Kenya, granted in October the previous year, is set to expire in just 17 days. While the company is currently operating under the existing license and cooperating with the regulator in the renewal process, NTSA insists that it will not issue a new license until Bolt provides a concrete plan to resolve the violations.
In response, NTSA has accused Bolt of violating the 2022 Transportation Network Companies (TNC) Regulations, specifically related to commission charges and an unauthorized booking fee. These regulations explicitly prohibit taxi-hailing apps from imposing any charges on customers other than the commission.
Bolt’s Country Manager, Ms. Ndungu, explained 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.” She also claimed that the company has been operating as a “fully compliant operator” in accordance with the regulations and is actively engaged in the renewal process.
Read Also: Bolt Driver Assaulted and Attacker Mobbed in Kenya
Bolt Faces 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, is under regulatory scrutiny for its commission rates. Its primary competitor, Uber, has expanded its services to additional Kenyan towns.
In response to these concerns, NTSA has demanded that Bolt clarify its commission structure, cease alleged illegal booking fees, and strictly adhere to regulations limiting commissions to 18 percent while prohibiting booking fees.
NTSA has informed Bolt of possessing “substantial evidence” of commission rates exceeding the 18 percent limit and unauthorized booking fees.
The Estonia-based company, which initially entered Kenya as Taxify in 2016, is racing against time to meet NTSA’s demands before its license expires on October 28. Cosmas Ngeso of NTSA emphasized, “We will consider renewing your license once these issues are addressed, and we await your prompt response and compliance.”
Potential Consequences of Bolt’s Suspension in Kenya
If Bolt were to cease its operations in Kenya due to a denied license renewal, several consequences could arise. 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 suspension 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 in this regard.
Read Also: Bolt Nigeria Now Offers 10% Commission to its Drivers
Challenges in Kenya
In a separate incident, an unidentified Nigerian man in Kenya reportedly faced a violent assault by a mob after physically assaulting a female Bolt driver in Kenya. This incident was reported on social media.
In July, Bolt’s app in Kenya was linked to the activities of a gang of kidnappers in the country’s capital, Nairobi.
Furthermore, e-hailing drivers in Nigeria accused the company of being insensitive to their plight after it refused to increase fares and accept a reduction in commission following a fuel subsidy removal, which resulted in a significant increase in fuel prices.
