Bolt fights back against Kenya's crackdown on ride-hailing apps

Bolt, the ride-hailing giant, is locked in a high-stakes standoff with the government over who really calls the shots in the fast-growing digital taxi industry.

The Estonia-based company insists regulators are overstepping, arguing it’s not a transport provider at all, but merely a digital platform connecting drivers and passengers, placing the firm outside the direct control of the National Transport and Safety Authority (NTSA).

But Kenyan authorities see it differently. Lawmakers and the NTSA warn that leaving the sector unchecked has fueled growing chaos: Drivers claim they’re being exploited by Bolt’s opaque systems, while passengers have frequently raised alarm over safety and reckless driving by the drivers. At the heart of the clash is a bigger question: can a company that moves millions of people daily really avoid being treated like a transport operator?

“The need to amend the rules was informed by our mandate to ensure the safety of all those who use public roads in Kenya through the promotion of professional driver training to provide a foundation of the proper skills, knowledge and attitude that will allow drivers to operate for decades into the future,” argued NTSA.

Bolt, in its petition before the High Court Judge Roselyn Aburili against the NTSA, the Transport Cabinet Secretary, the National Assembly and the Attorney General, lamented that they are now required to apply for a license, and NTSA has the power to cap how much ride-hailing companies get from each trip.

The Estonia-based company argued that the regulations also require all industry companies to share data on drivers and passengers and ensure their insurance.

While describing the regulations as draconian, Bolt argued that it does not own any vehicles and that the move will kill the country’s digital platform taxi business.

It argued that, for example, the commission is paid based on the fare collected, which is determined by distance, time and demand.

According to the firm, the directive to cap the commission will lead to losses for the drivers who are independent contractors.

“The NTSA Regulations have a direct and substantial impact on the businesses of Transport Network Companies (TNCs) and Transport Network Drivers (TNDs). The introduction of these regulations has affected key aspects of their operations, including pricing mechanisms, compliance requirements, and operational flexibility, which are critical to their business models,” Bolt’s lawyer, Faith Macharia, told the court.

The court heard that the regulations also scrapped booking fees. Macharia said that drivers will be forced to pass the cost on to passengers as they cannot cope with the new price regulations.

“Drivers, whose earnings are already impacted by operational costs, have been forced to bear the brunt of the financial strain, passing it on to customers through increased fare rates and reduced availability, as seen in recent driver strikes and service disruptions. For Bolt, these limitations not only infringe the constitutional property rights but also stifle innovation, hinder market competitiveness and compromise the quality of service offered to passengers,” she said.

According to her, there is no justification to regulate the prices, as there is no evidence that the ride-hailing market has failed.

According to Bolt’s lawyers, Zillah Moka and Alice Kamau, both traditional and digital platform-based companies compete for passengers and operate in the cities.

Nevertheless, it argued that those who run traditional taxis operate under the same conditions they used while those on digital platforms are over-regulated.

The firm asserted that all market players, including traditional and digital-based services, should be regulated fairly and equitably.

“ Both traditional taxis and TNCs operate in similar urban environments, yet TNCs are subject to more onerous rules even though they only provide a platform service and do not provide the transportation service and without evidence that they present greater risks. This disparity is unjustifiable and violates the principles of fairness and proportionality,” Bolt argued.

The firm also argued that the license requirements are unfair to the drivers. According to Bolt, requiring drivers to share passengers’ data with NTSA and demanding that they have a separate insurance cover is discriminatory, as those running traditional taxis and matatus are not required to do the same.

“These obligations are not only novel but also illegal, as they are not provided for in the NTSA Act. The incidental powers doctrine cannot be used to justify actions that are fundamentally new and beyond the scope of the NTSA Act. These are substantial policy shifts that should be expressly authorised by the legislature, not inferred through broad interpretations of the NTSA’s mandate,” said Bolt’s Kenya General Manager, Demetrius Winston Kanyankole.

According to him, NTSA has no role in ensuring that vehicles are insured. He further argued that the regulations were passed without public participation, while the Parliament disregarded stakeholder feedback and ignored concerns raised by the industry players.

According to him, the August House has rendered the parliamentary review process a mere formality, reducing Parliament’s role to a “rubber stamp” rather than an active participant in legislative scrutiny.

He said that NTSA has already capped the commission at 18 per cent. According to him, there is no clarity on how the commission was tabulated.

“ Bolt has been forced to reduce its expenditure, which in turn affects the quality of its services, the safety of its passengers, the investment into the economy, and the job security of its employees. It has also curtailed the petitioner’s ability to enhance the technological features of its services and improve service efficiency and customer experience,” Wilson said.

“Additionally, with the capped commissions, the petitioner has limited capacity to reinvest in service improvements, customer support, and technological developments.”

Bolt wants the court to declare the National Transport and Safety Authority (transport network companies, owners, drivers and passengers) Regulations, 2022, as unlawful, unconstitutional and invalid.

However, the Parliament argue that NTSA regulations were approved in February 2023, after a rigorous public engagement process.

Through lawyer Suzanne Khadambi, the National Assembly claimed that although Bolt argued that Parliament had not conducted public participation, this role was to be carried out by the NTSA.

“ In light of the foregoing, the third respondent submits that the Regulations were procedurally enacted. The Petitioner has failed to demonstrate any procedural impropriety that would warrant a declaration of unconstitutionality,” Khadambi said.

She asserted that the court should take caution, as it would create a void if the regulations were outlawed.

“ Should the court find any merit in the Petition, we urge this Court to exercise judicial restraint as a declaration of unconstitutionality would create a regulatory vacuum, exposing the public to unregulated and potentially unsafe transport services,” she added.