By JOHNSON KANAMUGIRE

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Taxi operators are crying foul after the regulator allowed Volkswagen to adopt a lower tariff structure than its competitors.

While other car-hailing services charge Rwf1,500 for the first kilometre and Rwf700 for the next kilometres, VW’s charges Rwf600 for the first kilometre and Rwf730 for the next.

This means that for a five-kilometre journey that costs Rwf4, 250 with VW cabs, other taxi hailing companies such as Yego will charge Rwf5,000.

The difference in pricing — which is set by Rwanda Utilities and Regulatory Authority (RURA) — has disrupted the business and given Volkswagen a competitive edge over its competitors, who accuse the regulator of favouritism.

In addition, VW’s hailing vehicles are neither charged parking fees nor statutory monthly payments to RURA unlike its competitors.

Rwanda Today spoke to taxi operators across Kigali, who called for a level playing field.

Unfair

“We believe that if we do the same business in the same market we should be subjected to uniform tariffs. Otherwise, it is unfair when you consider the current state of taxes and other expenses,” said Gaga Ntawumenyanayo, a Yego cab driver in Kigali.

RURA figures for this year show that the country has over 1,000 fleet grouped in 43 taxi companies and co-operatives.

The concerns are, however, shared by those mainly operating in Kigali where Volkswagen has deployed heavily some of its new vehicles produced at its just-opened local car assembly plant.

Initially, VW management had indicated that it would release more than 150 vehicles as part of the ride-hailing service in 2018, with a plan to boost to 250 vehicles this year.
Its relatively lower tariff structure see more people opt for its services at the expense of the traditional cab owners.

“Many of our clients are resorting to VW cabs on Move upon learning about the difference in tariffs. We believe that if the business is the same we should be treated the same by the regulator,” said a Yego cab rider attached to the Gisimenti zone in Gasabo district.

RURA director general Patrick Nyirishema admitted there were reasons for putting up a lower tariff structure for Volkswagen.

However, efforts to secure a face-face interview with him proved futile. Rwanda Today was instead referred to the principal engineer in charge of transport planning and industry development Emmanuel Asaba Katabarwa, who also did not get back to us by press time.

Sources however, told Rwanda Today that the lower tariffs are an incentive by the government offered to VW, which include a tax-free regime for the cars assembled in Rwanda by the German car-maker.

Efforts to reach VW for official comment proved futile by press time.

Innocent Rubangisa one of the VW cab drivers said that they were receiving a “rising number of clients who are attracted by their relatively lower rates in the market."

VW also recently launched its electric Golf cars in Rwanda on a tax-free basis which are also being used under the Move app for car hailing services.

The VW car hailing app has about 27,000 registered users and 60,000 rides from the beginning of this year.

Their main competitor — Yego cabs — has over 800 vehicles mainly operating in Kigali. The business is run through a phone app developed by local tech company Yego Innovations, which also runs a taxi