Ride-hailing titan Uber has suspended its operations in Tanzania. The company cited increasing regulations as the reason it is suspending its services in the country.
A statement released by Uber says that the “guide fare” required by the Land Transport Regulatory Authority (LATRA) is the major reason for suspending its services in the country. The regulator decides and approves fares for ride-hailing companies in the country taking away the autonomy to decide fares for themselves. What this means is that ride-hailing operators such as Uber and Bolt cannot decide prices for their rides for themselves. This, therefore, creates a tough regulatory environment for the operators.
The Land Transport Regulatory Authority (LATRA) only recently doubled the rates per kilometer for these companies as per the reality of a hike in fuel prices. According to Uber, last month LATRA ordered ride-hailing companies to reduce their service fee from 25 percent which it charges to 15 percent. Uber is yet to make a review of its service fee.
In its statement, Uber said that “We have made the difficult decision to suspend our services in Tanzania from Thursday 14 April 2022. The guide fare set by the Land Transport Regulatory Authority (LATRA) has posed significant challenges for systems like Uber to continue to provide services to our customers. It becomes increasingly difficult for us to continue providing services. We will not be able to provide services until the environment becomes friendly for us to continue providing services. The decision comes after the authorities set regulations that are a major challenge for systems like Uber to run its business. We will be working closely with the drivers on this transition.”
Uber which launched in Tanzania in 2016 says it is suspending its operations in Tanzania but friendlier regulations could see it resume its services in the country. “We hoped that this would include creating an enabling environment for domestic and international trade to thrive in a positive and balanced way, but unfortunately, the situation is contrary to expectations. Although we have closed down the services of UberX, UberXL, and UberX Saver in Tanzania, we are ready to work with the relevant authorities to develop regulations that will enable the technology to thrive, so that we can resume providing our favorite services,” Uber said.