Uber suspended its operations in Tanzania today, citing a tough regulatory environment that has made it difficult for the ride-hailing company to continue running in the East African country.
In a statement, Uber noted the “guide fare” by the Land Transport Regulatory Authority (LATRA) as the main contributor. The authority sets and approves fares for ride-hailing operators in the country, taking away the ability of companies like Uber and Bolt to set prices. The authority recently doubled the per-kilometer rate for ride-hailing companies due to increasing fuel prices.
Uber, in a response to TechCrunch queries, said that the authority issued an order in March requiring ride-hailing companies in Tanzania to lower their service fee to 15% from the 25% commission it charges. Uber’s attempt to have this reviewed was unsuccessful.
“We have made the difficult decision to suspend our services in Tanzania from Thursday 14 April 2022. The guide fare set by the Land Transport Regulatory Authority (LATRA) has posed significant challenges for systems like Uber to continue to provide services to our customers. It becomes increasingly difficult for us to continue providing services. We will not be able to provide services until the environment becomes friendly for us to continue providing services,” Uber said in a statement.
“The decision comes after the authorities set regulations that are a major challenge for systems like Uber to run its business. We will be working closely with the drivers on this transition,” it said.
Uber’s operations in Tanzania will remain suspended indefinitely, although the company hinted that they could resume services with friendlier regulations.
“We hoped that this would include creating an enabling environment for domestic and international trade to thrive in a positive and balanced way, but unfortunately, the situation is contrary to expectations,” it said.
“Although we have closed down the services of UberX, UberXL and UberX Saver in Tanzania, we are ready to work with the relevant authorities to develop regulations that will enable the technology to thrive, so that we can resume providing our favorite services.”
Uber launched in Tanzania in 2016.