Bolt drivers to earn less as firm effects 16% VAT

Bolt drivers are set to take home less pay after the ride-hailing platform passed on the government’s 16 per cent value-added tax to its drivers.

This is expected to set the stage for another round of tussles with the platform workers, who have already been complaining of low incomes.

The ride-hailing company, however, maintains that the move aligns with the VAT (Electronic, Internet and Digital Marketplace Supply) Regulations of 2023.

As part of this change, Bolt’s commission will now attract VAT at a rate of 16 per cent.

Over the past 15 months, Bolt says it has absorbed the VAT obligation on behalf of its drivers, ensuring their earnings remained unaffected during a period of adjustment.

It argues that with regulatory clarity now in place and following guidance from the Kenya Revenue Authority (KRA) and the National Transport and Safety Authority (NTSA), it has decided to pass on the VAT obligation to drivers.

 “Our focus remains on compliance, fairness, and sustainability,” said Bolt Kenya and Tanzania General Manager Dimmy Kanyankole.

“We are committed to supporting our drivers through this transition and will continue to engage them through awareness and education and offer them opportunities to ensure they maximise their earnings.”

Last year the ride-hailing apps staged two demonstrations to protest what they termed as ‘exploitation’ by the platform drivers in the country.

Among the bonds of contention has been the commission rate taken by the ride-hailing apps.

Uber and Bolt launched in Kenya in 2015 and 2016, respectively, and their low prices and convenience made them popular options in Nairobi.

However, increased competition and a push to acquire customers have led to pricing decisions that drivers disagree with.

Four months ago, the ride-hailing giants Uber and Bolt, were forced to raise their fares in Kenya amid pressure from drivers using the platforms.

At the time Bolt had announced a 10 per cent increase to its fees in Kenya, barely a week after Uber also announced a similar 20 per cent price hike in the country.

 Little App, which also offers ride-hailing services in Kenya, announced a 15% price hike.

Soaring operational costs, including the cost of fuel, have led frustrated drivers in Kenya to organize against the apps in recent months, putting them under pressure to raise prices.

Some taxi operators have resorted to offering alternative price lists and renegotiating fares with customers, ignoring fares displayed on the app.

Bolt maintains that the step reflects its ongoing commitment to regulatory compliance and responsible business operations within the Kenyan digital economy.