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Uber slashed its prices in Mombasa just a few days after Little Cab, which is owned by safaricom, launched its cab hailing service in the Kenyan city.
Little About Little Cab
Safaricom is the biggest company in East and Central Africa and the leading mobile network operator in Kenya. The company’s looming presence in Mombasa is enough to prompt Uber into a turf war with Little Cab. Little Cab (now Little) first launched into the rideshare market in July 2016. The service started its campaign from the capital city of Nairobi at the time Uber was just settling in the city.
Dealing a mammoth blow to Uber, Little Cab announced that riders can pay fares using M-PESA in addition to the cash and debit card payment options provided for using this service. M-Pesa is Kenya’s top mobile-phone based financial service. It is the favoured mobile money service developed by Safaricom with 70% market share out of the14.2 million active mobile money users in Kenya. All these details peg Little Cabs as a worthy Uber rival.
What Got Cut?
Uber’s base fare was cut so low. The present cost is put at KSh50 which indicates about 40% slash compared to the former KSh80. Uber has also slashed its minimum fare from KSh250 to KSh150.
Pricing Comparison and Why Slashing is Necessary
While Uber charges as low as Ksh150 as minimum fare, Little Cab, on the other hand charges a minimum fare of KSh270 and currently has no set base fare. This pocket-friendly price makes Uber the preferred option for taxi hailing services in Mombasa.
With the launch of Little Cab’s USSD platform that allows users without smartphones to hail a cab, the rock bottom pricing is a little bit necessary for Uber to stay in the race to dominate Kenyan rideshare space. This is obviously not the first time Uber is using rate cuts to encourage passengers to use the service. For the ride hailing giant, being affordable and remaining the price to beat is a reliable way to make things difficult for any competitor, in this case, Safaricom.
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