Cab drivers in Kigali have complained of the recent upwards review of tariffs, saying it has led to low business.
New tariffs that came into effect on June 15 kept the fare charged for the first kilometer unchanged at Rwf1500 but increased charges on additional 30 kilometers from Rwf500 to Rwf700 each.
“We celebrated the increment because unlike before our calculations showed us that the tariffs are enough to keep up with the operational costs that have become unbearable especially with the mandatory use of fare meters for which we incur 10.5 per cent of earning on each ride.
However, little did we expect that it was going to result in the loss of clients,” complained Gaga Ntawumenyanayo, a Kigali-based cab driver.
“We are waiting to see whether the market will improve with time may be when passengers get used to changes,” he added.
He said save for a few foreign nationals, the usual local clients shunned taxi cabs to relatively cheaper means of transport like taxi moto following the tariff increment.
Rwanda Today survey indicated that for instance, the eight-kilometre ride in a taxi cab that cost Rwf5,000 previously shot to Rwf6,400 after the new tariffs came into force while the 15-kilometre cab fare of Rwf8,500 previously increased to Rwf11,300. The cab fare for 18-kilometre journey, which stood at Rwf10,000 under the previous tariff structure rose to Rwf13,400.
Operators argue that while they lauded the tariff increment, the ensuing decline in clientele risked to plunge most into further losses due to pilling cost burden in form of tax, parking fees, insurance and routine vehicle maintenance as well as ever-rising fuel costs.
Particularly, most took issue with the 10.5 per cent revenue margin paid to Yego Innovation Ltd, the Indian firm providing and operating the fare meter.
A section of the loss-making operators kept pushing for a reduction of the margin which they singled out as their heaviest cost burden while a considerable number of taxi cabs engage in regular cat-and-mouse chase with the regulator and police over switching off the devices.
“For us we propose that the government considers reducing the 10.5 per cent revenue margin Yego takes from us even if that implies lower the tariffs we charge because that’s what we find sustainable. Otherwise it doesn’t make sense increasing the tariffs for us to lose customers,” said Francois Karangwa, a cab driver in the business for three years.
Rwanda utilities regulatory authority (Rura) statistics for last year suggested that 70 per cent of more than 943 taxi cabs in the country still shunned the use of fare meters.
While those who spoke to Rwanda Today largely attributed this to attempts to dodge charges associated with using the devices, Rura officials insist most rank in the category of those lacking awareness on its benefits or exhibited resistance to change.
The agency justifies the 10.5 per cent charge as needed to cover the cost of purchasing, running and maintaining the devices while the firm used another funds for branding and advertising of the cab services without going back to the operators.
Rura head of transport regulation department Emmanuel Katabarwa said the recent tariff increment was part of the general review of the fares unchanged since 2015.
“There are so many things that changed since then and there is a whole range of parameters we consider that make up the cost of providing the service. I don’t know why they choose to zoom in on the fare meters alone,” he said.