Uber has appealed to the Supreme Court of Kenya to nullify the proposed digital taxi hailing regulations that were published by the Ministry of Transport in July this year.
In its petition, Uber says the rules are unconstitutional, discriminatory, discouraging to foreign investments and infringing on its rights and those of its riders and partners.
The rules, set to come into effect in a couple of weeks, have been a work in progress seeking to streamline the fast-growing digital-hailing industry.
The proposed law capped the maximum commission that a driver should pay to a transport network company such as Uber at 18% of the total earnings of the trip. This requirement is part of the regulation that has rubbed Uber the wrong way and hopes the Supreme Court could offer a reprieve.
In its prayers to the court, Uber says, “The introduction of 18% as the ceiling for the allowable commission has the potential to stifle innovation and reduce the petitioner’s economic feasibility of investing in the market.”
The company opines that as a free market, companies operating in Kenya have the right to negotiate commercial agreements without external influence. The company further argues that other proposed levies that the Kenya Revenue Authority (KRA) is working on will place a higher burden.
“The Kenya Revenue Authority is presently in the process of finalizing digital service tax regulations as well as VAT regulations that would impose additional taxes of 1.5% and 14% on the petitioner’s (Uber) service fees. This coupled with the proposed cap in the commission will have a major impact on the petitioner’s revenue from the Kenyan market which in turn will have an adverse impact on the Kenyan market prioritization for investment.
The new law also demands that Uber and other digital taxi companies must obtain a transport network license from NTSA to operate. Uber is also protesting this requirement, saying that it’s not a provider of transport service provider but rather a facilitator through its app.
“Some aspects of these regulations, such as the commission reduction and requiring companies to be registered in Kenya, are not conducive to doing business in Kenya and are not good for drivers or riders as they deter foreign investment into the country and limit the role private businesses can play in supporting and growing the Kenyan mobility sector,” said Lorraine Onduru, Uber East and West Africa’s head of communications.
Onduru says that Uber has no plans to suspend operations in Kenya as it did in Tanzania.