Broken dreams as Uber drivers face auctioneers
At the start of 2018, Vincent Bett was confident that the fortunes had come to him, changing the social status of his young family.
The 29-year-old father of two had been in the taxi business not as a self-employed or car owner but operating a vehicle as a hired driver in the years 2014 to 2018.
His earned a salary of between Sh30, 000 and Sh40, 000 per month, depending on the season and determination.
A golden opportunity arose when Stanbic Bank, Uber Technologies and CMC entered a partnership to provide drivers with low-cost vehicles.
Bett was granted a chance to own a Suzuki Alto, common with Uber Chap Chap operators, courtesy of the pact under which the drivers were to get the Sh835,000 low-cost vehicles at 14 per cent interest, payable over three years.
Stanbic Bank advanced loans to more than 500 Uber drivers under the partnership to help them acquire the Suzuki Alto vehicles.
However, conditions included a deposit of Sh100,000 and payment of Sh6,700 a week. Servicing, maintenance and fuelling of the car was also at the loanee’s cost.
With all those variables remaining constant, the loan totalling Sh1.2 million was expected to be repaid in three years maximum.
During the first six months his efforts were rewarded and he was able to pay the bank Sh6,700 a week and still retain between Sh10,000 and Sh15, 000.
But things changed drastically after other Uber drivers operating vehicles with bigger engine capacity, urged Uber Technologies to standardise the charges across the board.
While Uber Chap Chap charged Sh16 a kilometre, at the medium level Uber X charged Sh27 while targeting the high class with Sh42 per kilometre.
The situation was not made any better with taxi-hailing apps mushrooming to fill a hole in Nairobi’s poor public transport and charging similar small amounts.
Together with slowing economy, expensive spare parts, which were not available locally, and repairs limited to only CMC workshops in Nairobi, something had to give, and Bett found himself unable to make ends meet and service the loan.
So, on a busy Friday afternoon, November 22, 2019, auctioneers who had been tracking the aspiring fleet owner snatched his car as he was waiting for a client at a petrol station in the Upper Hill area of Nairobi.
All his sweat has gone down the drain. His car is among those in auctioneer yards awaiting disposal at the fall of a harmer.
His car was among the 28 advertised in a local daily on August 6, for auction by Stanbic Bank.
But, Bett just one among the hundreds of drivers who have been forced back, according to John Kimani, National chairman, Digital Partners Society.
He says CMC and Stanbic Bank teamed up and loaned 486 cars, specially, Suzuki Alto a new brand in the local market at the start of April. At the start, Kimani adds, it was a noble idea, because of the pricing.
“Under the Uber Chap Chap category they were charging Sh16 per kilometre attracting a huge clientele base who were price conscious”.
Uber X was charging Sh27 a kilometre while the premium one Uber Select was charging Sh42 a kilometre.
Kimani argues that because of the hype, the market was flooded with hundreds of Suzuki Alto at between the end of 2018 and at the start of 2019.
“For every five cars in major streets of urban centres and especially, Nairobi, for every five cars one was an Alto”, he notes.
“But currently we struggle to see them because they are either at auctioneers’ depots, CMC workshops or at worst along roadsides selling vegetables and secondhand clothes”, claims Kimani who has decades of experience as a taxi driver and operator.
He further claims that the project was a failure from the word go, because of the cost of spare parts, availability and engine power.
Because of the pricing issue spare parts have to be imported in bulk and through shipping lines which can be three months at the shortest time to arrive and be cleared at the Port of Mombasa.
This meant that most drivers whose vehicles were damaged incurred huge losses as their cars awaited repair while the bank continued charging them since they did not have insurance.
The vehicle, a Japanese model but manufactured in India, has an engine capacity of 800 and therefore limiting its capacity to go off road.
But the final nail in the coffin was allowing other taxis under Uber to complete with the new entrants.
To date, over 150 cars have faced the auctioneer’s harmer as per available records since February 2019.