Market share fight among cab companies gets even hotter


(Posted 25th August 2016)

Having a partner like Safaricom, Kenya’s leading mobile communications and mobile money company, clearly has its benefits as competitors like UBER and others are presently finding out at their expense.
Little Cabs has widened their scope by giving clients without smart phones, and there are still plenty out there in Kenya and elsewhere, the option to speed dial for a cab by simply keying in *826# to order for their ride.
Notably will passengers also get an airtime bonus from Safaricom for their first and fifth ride of up to 500 Kenya Shillings.
This initiative massively expands the appeal of Little Cabs beyond the smart phone market and estimates are that the company will rake in extra passengers by deep double digit margins while their rivals are limited to those not just owning smart phones but also know how to operate them, i.e. being savvy enough to download the various apps needed to be able to hail cabs from other providers like UBER.
Said one pundit on condition of anonymity: ‘When UBER let the genie out of the bottle they opened the door for others too and are now probably faced with the stiffest competition in any of their African markets. Safaricom smelled an opportunity, took it and with its infrastructure and the number of subscribers they have the muscle to capture market share from their rivals. The airtime gimmick also works because 500 bob is money few will let pass‘.
For this correspondent though are hotel limos still the non plus ultra, from pick up at the airport to trips across the city to being returned to the airport, all provided by a trusted supplier, i.e the chosen hotel without having to divulge personal details on Apps to be able to subscribe to the UBER’s of this world. And should it be necessary is a quick *826# an easy solution to get from point A to point B by using a Safaricom number, again without having to provide personal details before activating an App.


One response to this post.

  1. […] Pundits in East Africa with an eye on the global market development are speculating how the massive 1.27 billion US Dollars loss incurred by UBER in the first half of this year will affect operations, and market behaviour in the region. UBER Kenya is engaged in a bruising battle with its main rivals, especially Safaricom backed ‘Little Cabs‘ following a downward revision of the UBER tariffs. This not only brought about conflict with UBER drivers, whose well near industrial action forced the company to pay significant top ups to them, but also woke the proverbial sleeping dogs when other rival App based cab hailing services followed suit, negating the market impact of UBER’s action. On a global scale is it the battle between UBER and rival LYFT making headlines with business news service Bloomberg and there as in Kenya right now has the strategy of lowering fares and then being forced to cough up money for top up payments to drivers eroded profitability. ‘Little Cabs‘ recent move to add market share by offering its services to non smart phone users by dialing *826# has heated up competition yet more as it now gives access to ‘ordinary‘ phone users to cab hailing services at equally low rates which smart phone users with a downloaded App have enjoyed for some time now. A recent article, link below, has already looked at this development and the revelation of massive global losses by UBER will no doubt further rattle the company’s management in East Africa. Here they are faced with stark choices now, to either raise tariffs again to reduce top up fees or else find deep pockets to help finance the losses with fingers, toes and legs all crossed hoping the trend will bottom out and greener financial pastures return as was the case when UBER first took the market by storm.… […]


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