If Ride-Hailing Prices Go Up, Will Passengers Still Book Rides?

There's a reason many Kenyans instinctively open a ride-hailing app before stepping out.

Sometimes it's cheaper than driving yourself, or it’s safer than waiting for a Matatu late at night. Sometimes it's simply the easiest option after a long day.

Now imagine opening the same app and finding every trip noticeably more expensive.

Would you still book it?

That's the question quietly sitting behind President William Ruto's directive to the National Transport and Safety Authority (NTSA) to review ride-hailing pricing and introduce minimum fares for drivers.

On paper, the idea makes sense.

Drivers have spent years complaining that fares no longer reflect the rising cost of fuel, vehicle maintenance, insurance and financing. Anyone who owns a car understands those costs have climbed sharply.

But ride-hailing doesn't work quite like most businesses.

It's easy to assume that charging more automatically means earning more.

In reality, drivers often depend just as much on the number of trips they complete as they do on the price of each one.

Think of two drivers.

One completes 15 reasonably priced trips in a day. Another charges higher fares but only gets seven bookings because some passengers decide to take a Matatu, share a ride with friends or postpone non-essential travel.

The first driver could easily finish the day with more money in their pocket.

That's because ride-hailing is built on volume.

Cars make money when they're moving, not when they're parked waiting for the next request.

One of the reasons ride-hailing grew so quickly in Kenya is that it became affordable enough for everyday use.

Office workers book rides when they're running late. Families use them for airport trips. Friends split fares on nights out. Some people choose them because public transport isn't available where they're headed.

But affordability has always been part of that equation.

If prices rise too sharply, some passengers will simply change their habits. They'll board a matatu, call a friend, drive themselves or skip the journey altogether.

Every booking that disappears is income a driver never gets the chance to earn.

Meanwhile, the bills don't stop. Loan repayments, insurance premiums, servicing and fuel still need to be paid whether the car completes five trips or fifteen.

None of this means drivers shouldn't earn more.

Their concerns are genuine, and few would argue that operating costs haven't increased.

The challenge is finding a solution that improves earnings without reducing demand.

Ride-hailing platforms have traditionally relied on flexible pricing because demand changes throughout the day. Morning rush hour looks different from a quiet Tuesday afternoon. A rainy evening creates different conditions from a sunny Sunday morning.

The question for policymakers is whether a fixed minimum fare can protect drivers without making the service less attractive to passengers.

Because, in the end, the industry's success depends on something surprisingly simple.

Drivers need enough passengers to stay busy, and passengers need fares they can still afford.

If either side walks away, everyone loses.