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Uber wants court to overturn Kenya’s new ride-hailing law, which limits service charges to 18% • londonbusinessblog.com

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Uber has appealed to Kenya’s highest court to overturn its new digital taxi arrest regulations, alleging some aspects are unconstitutional and discriminatory, discourage foreign investment and infringe on its rights and those of its drivers. and partners.

The regulation, which will take effect in a few weeks, has been evolving since 2016 when drivers protesting a 35% price cut for commuting by Uber caught the attention of lawmakers.

In court files seen by londonbusinessblog.com, Uber is challenging the decision to cap its commission to 18% and evaluate its pricing structure, saying it would hurt its revenues and discourage further investment in the country. Uber currently charges a 25% commission on revenue per trip, and the new rate will force the company to cut its service charges by 28%.

The company argues that Kenya is a free market, where ride-hailing companies have the right to enter into commercial agreements without outside influence. It also claims that the regulations were drafted and published without following due process and public participation.

“Introducing 18% as a cap on allowable commission has the potential to stifle innovation and reduce the economic viability of the petitioner to invest in the market,” the documents filed by Coulson Harney LLP, the law firm representing Uber, referring to the new law by the Department of Transport and Infrastructure, which mandates the country’s National Transport and Safety Authority (NTSA) to enforce it.

“The Kenya Revenue Authority is currently finalizing the tax rules for digital services and the VAT rules that would impose additional taxes of 1.5% and 14% on the petitioner’s (Uber) service charges. This, coupled with the proposed ceiling in the committee, will have a major impact on the petitioner’s income from the Kenyan market, which in turn will have a negative impact on Kenyan market prioritization for investment,” it added.

Uber also criticized the condition that all taxi companies must obtain a transportation network license from NTSA in order to operate, saying it was not a transportation service, but an app that offers brokerage services.

It said the regulations are discriminatory because only people with Kenyan Personal Identification Numbers (PINs) can obtain the mandatory license. In addition, only entities that are legally registered in Kenya and have physical offices in the country are eligible for the permit. Ride-hailing companies in Kenya, including Bolt and Little, are also required to share driver and rider data at the request of the authority. Uber said this would violate the new data protection law.

Uber East and West Africa’s head of communications, Lorraine Onduru, hinted that Uber had no immediate plans to shut down operations in Kenya, as it did in Tanzania after the introduction of new fares.

“We remain committed to Kenya and ensure that more drivers and riders can experience the benefits of ride hailing.”

However, she stressed that “some aspects of these regulations, such as lowering the commission and requiring companies to register in Kenya, are not conducive to doing business in Kenya and are not good for drivers or riders as they prevent foreign investment in Kenya.” deter Kenya. the country and limit the role private companies can play in supporting and growing the Kenyan mobility sector.”

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