Experts warn that government proposals to nearly double the minimum fare for ride-hailing services could deepen cost-of-living pressures, reduce demand for digital taxis, and ultimately leave many drivers earning less despite charging higher fares.

🇰🇪 Breaking It Down

The warning follows a directive by President William Ruto to introduce minimum fare floors and commission caps for digital ride-hailing platforms as part of efforts to improve drivers' earnings amid rising fuel costs and mounting pressure from operators.

Speaking after brokering a deal to end a stalemate with public transport operators in Mombasa on May 22, 2026, Ruto directed the Ministry of Roads and Transport, through the National Transport and Safety Authority (NTSA), to fast-track regulations governing the digital taxi sector.

"The people in that space sometimes work for 16 hours to be able to make ends meet. There is a need for urgent regulations," Ruto said.

📌 What You Need to Know

While the proposal has been welcomed by some drivers, digital economy experts are now cautioning that raising the minimum fare could produce the opposite effect by reducing the number of trips drivers complete each day.

According to Mbugua Njihia, an expert in Pan-African digital infrastructure and financial ecosystems with more than 20 years' experience in digital systems, the proposed pricing framework could unintentionally weaken a sector that supports thousands of livelihoods.

"The issue is not whether drivers deserve better earnings. They do," Njihia told  Kenyans.co.ke .

"The real question is whether administratively raising fare floors improves net driver income, or whether it suppresses demand, reduces trip volumes, increases idle time and pushes both drivers and passengers into informal alternatives," he asserts.

Njihia argues that driver earnings are determined by more than the price charged per trip.

Instead, they depend on the number of completed trips, passenger demand, waiting time, fuel costs, vehicle maintenance, financing obligations and platform commissions.

📰 Source: Kenyans.co.ke