Bolt drivers in Kenya are set to take home lower earnings following the ride-hailing company’s decision to pass on the government’s 16% Value Added Tax (VAT) to them. This move has sparked concerns among drivers, who have already been vocal about low pay and high operational costs.
The decision, Bolt states, aligns with the VAT (Electronic, Internet and Digital Marketplace Supply) Regulations of 2023. As part of this change, the commission that Bolt deducts from fares will now attract VAT at a rate of 16%. The company claims it had been absorbing the VAT on behalf of drivers for the past 15 months to cushion them during a transition period.
Bolt Kenya and Tanzania General Manager Dimmy Kanyankole emphasized that the move was necessary for compliance with guidelines provided by the Kenya Revenue Authority (KRA) and the National Transport and Safety Authority (NTSA). “Our focus remains on compliance, fairness, and sustainability,” Kanyankole stated. “We are committed to supporting our drivers through this transition and will continue to engage them through awareness and education.”
The announcement comes at a time when ride-hailing drivers have been engaged in ongoing disputes with companies like Bolt and Uber over commissions and pricing structures. Last year, drivers staged two demonstrations protesting what they described as exploitation by the ride-hailing platforms.
The introduction of VAT on commissions follows a series of fare hikes in the ride-hailing sector. In response to drivers’ demands for better pay, Bolt increased its fares by 10% earlier this year, while Uber raised its prices by 20%. Another competitor, Little App, also implemented a 15% price hike. Despite these adjustments, many drivers remain dissatisfied, citing rising fuel prices and other operational expenses as major concerns.
Some drivers have resorted to negotiating fares directly with passengers, bypassing the app-based pricing system. This trend underscores the growing frustration among platform workers over their shrinking earnings.
Bolt maintains that its decision reflects a commitment to regulatory compliance and responsible business operations in Kenya’s digital economy. However, with drivers already feeling the financial strain, tensions between the company and its workforce are likely to persist in the coming months.
