Tuesday, May 28, 2024

Bolt’s licence Renewal Declined by NTSA over Illegal Commission Charges and Booking Fees

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Kenyan transport regulator has declined to renew the licence of taxi-hailing company Bolt over alleged breaches, including illegal commission charges and booking fee, dealing the Estonian firm a blow as it lines up fresh investments to expand its reach in the local market.

Bolt had written to the National Transport and Safety Authority (NTSA) seeking the renewal of its operating licence, with days left to its expiry.

But the regulator declined the request citing mounting complaints from drivers and their representatives about alleged non-compliance and violation of regulations.

Correspondence seen by the Techknow Africa  shows that NTSA deputy director and head of licensing Cosmas Ngeso wrote to Bolt country manager Linda Ndungu last week informing her of the development that will see the firm lose its transport network company operator licence at the end of the month unless it addresses the breaches satisfactorily.

“Please note that the Authority is not able to proceed with renewal of your operator licence until when the issues raised by drivers and their representatives are satisfactorily addressed and rectified,” said Mr Ngeso in the letter to Bolt on behalf of NTSA director-general George Njao.

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“In light of these, we urgently request you to provide us with a concrete plan of action outlining steps your company intends to take to rectify this situation.”

Bolt’s current licence was issued on October 28 last year and is set to expire in the next 17 days.

The Techknow Africa reached out to NTSA’s Mr Njao inquiring if any other taxi-hailing firm was in Bolt’s situation but he did not respond despite promising to do so.

Ms Ndungu told the Techknow Africa  the firm has been operating as a “fully compliant operator” as per the regulations and is working on the renewal process ahead of the expiry.

“Bolt currently has a licence in the market, and continues to work with the regulator in the stipulated licence renewal process going forward,” she said.

NTSA says Bolt has been accused of breaching the provisions of Transportation Network Companies (TNC), Owners, Drivers and Passengers Regulations, 2022, with the “most pressing concerns” relating to commission charges and an “illegal” booking fee.

The regulations bar taxi-hailing apps from deducting customers any other charge apart from the commission.

But Ms Ndungu said Bolt was charging booking fee on customers as opposed to drivers.

“Bolt charges a fixed percentage booking fee that is paid by the passenger. The booking fee assists with covering support and enhanced technological features that ensure an even more efficient service on our platform,” said Ms Ndungu in an emailed response to our queries.

Bolt is the largest ride-hailing service provider in terms of towns, with its services available in 16 towns, including Kakamega, Nakuru, Naivasha, Eldoret, Kitale, Nyeri, Meru, Embu, Nanyuki, Karatina, Kilifi and Malindi.

The firm operates ride-hailing and delivery services in six African countries— Kenya, Ghana, Nigeria, Uganda, Tanzania and Tunisia— with over 47 million customers and 900,000 drivers on the platform.

Its biggest rival Uber operates in Nairobi, Thika, Mombasa and Nakuru, and expanded to five other towns — Kisumu, Eldoret, Naivasha, Elementaita and Gilgil in June last year.

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The regulator has ordered Bolt to provide a breakdown of the commission rates currently in effect, highlighting specific instances where rates have exceeded the allowed maximum of 18 percent.

Bolt is also required to explain the rationale behind its commission structure and also cease what NTSA describes as the illegal booking fee and ensure strict compliance with the regulations.

Not getting a licence renewal will deal a blow to Bolt which entered Kenya in 2016 as Taxify.

NTSA has told Bolt that it has “substantial evidence” that the company is charging commission rates higher than 18 percent and a booking fee in violation of sub-regulation (2) (g) of the TNC regulations.

The regulations bar taxi-hailing firms from setting drivers’ commissions’ at more than 18 percent. It also bars them from charging booking fees as additional charges on drivers beyond the commissions.

The Estonia-headquartered taxi-hailing firm faces the race against time to comply with the NTSA orders if it is to remain in operation past October 28.

“We will be available to consider renewing your licence as soon as these issues are addressed. We look forward to receiving your response and compliance at the earliest convenience,” said Mr Ngeso in the letter.

Samuel Musila
Samuel Musilahttps://techknow.africa
Passionate Software Developer and Tech content creator From Nairobi, Kenya

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