By Kinaga Mbugua
“Companies like Uber make vast amounts of money, while expecting drivers to provide a service for peanuts. All they want to do is expand, regardless of the impact. They are capitalist sharks, pure and simple.” These are words by Sayah Baaroun, head of the VTC union Unsa SCP-VTC.
Now, let’s see why Sayah said this.
The same day our Kenyan Taxis were rioting against what they term as ‘a bullish box out’ by Uber, one of the largest ride-hailing companies in the world, another demo was taking place in France. But this one was organized by Uber drivers, following a demonstration last week by a French Taxi association (Alternative Mobilité Transport-AMT) against the “voitures de tourisme avec chauffeur” (VTC)-Uber is one of these. Actually, it makes up 70 per cent of the ride-hailing companies in France.
Here were AMT’s reasons: One, that UBER hires independent drivers, some of whom are not trained to manage Taxi cabs. (True. Confirm this from the Uber website). Two, that Uber is siphoning drivers from AMT’s pool, and then using them against their employers and colleagues, at a cheaper rate. (True. Confirm from Uber site, the rate of cab hire). Three, that by working with Uber, LOTI companies were disregarding a legal order that limits them to group transport. But the law is ambiguous on this. So Uber identified a legal gap, and exploited it. (Brilliant I must say)
The riot by Uber drivers was financed by Uber, albeit secretly. In an email sent to the drivers, they were urged to participate in the strike against AMT since, “your future, that of your business, and that of your family are in danger.” and in lieu of this, the drivers must “react quickly and make themselves heard clearly, in order to protect our sector.” Officially though, Uber declined to comment on that protest. (Now that’s clear incitement right there!)
Back to Kenya now. We are not a pure capitalist country (with a free market policy). Actually, none is. On the contrary though, we are a welfare state. And welfare states (which by the way aren’t the best form of economic systems) exist to ‘protect’ their citizens. And this they do through a myriad of ways. Subsidies, tax concessions, tariffs, restrictive quotas. The list is endless.
And although there is broad consensus that protectionism (which is what this post is about) is largely positive, the magnitude of its impact on this UBER-Kenyan Taxi Association case, critically depends on our macroeconomic environment. UBER can’t possibly have their cake and eat it, while the hundreds, if not thousands of Taxi operators go out of their jobs. The government needs to develop a workable formula that doesn’t just put an end to this current fiasco, but even more, protects its middle class citizens.
Having UBER settle in Kenya is enough reason for international investors to know that our economic policies are welcoming. But that’s not why governments exist. Governments exist to ensure that people like the Taxi drivers don’t lose their jobs, in the name of bilateral trade. And if they must, a transition (supported by government) into a similar Uber interface becomes the option. Not leaving them to get fried up by foreigners who in turn, raise up their stakes at Wall street and not the NSE.
Barrack Obama said it better. That if the people cannot trust the government to do the things for which it exists- to protect them and promote their common welfare- all else is lost.
The writer comments on topical issues.