The High Court’s Constitutional and Human Rights Division in Nairobi has stopped the government from enforcing an 18% limit on the commission ride-hailing companies can take from drivers, after finding that the restriction was not properly justified.

 

The court also ruled that requiring platforms to keep detailed information about passengers, drivers and their journeys for three years and provide it to the transport regulator breached the constitutional right to privacy.

 

Lady Justice Florence Muigai Aburili declared key parts of the Transport Network Companies, Owners, Drivers and Passengers Regulations, 2022 unconstitutional in a case brought by Bolt Operations.

 

The 18% rule concerns the share of a passenger’s fare that a ride-hailing company can take as its commission. A passenger paying KSh1,000 for a trip, for example, would have had no more than KSh180 taken as the platform’s commission under the rule, with the remainder going to the driver or vehicle owner, before other deductions or costs.

 

The limit was introduced after drivers protested against commissions of 25% to 30% of their earnings. Uber later reduced its commission to 18%, and the government adopted the figure in regulations that came into force in 2022.

 

Regulation 9 required agreements between ride-hailing platforms and drivers or vehicle owners to set the platform’s commission at no more than 18% of total trip earnings.

 

Bolt challenged the restriction, arguing that the government had not shown why the limit was necessary or proportionate.

 

Aburili found that the government had not carried out the required regulatory impact assessment and had not provided sufficient evidence to justify the restriction.

 

The court has therefore suspended enforcement of the 18% ceiling for 12 months. It has not set a new commission rate or ordered platforms to increase what they charge drivers.

 

During that period, the government must carry out the required assessment and public participation and address the defects identified by the court.

 

The second dispute concerned the information generated when people use ride-hailing services.

 

Under Regulation 17, platforms were required to retain detailed trip and payment information for three years. The records included passenger and driver details, locations, times, fares and payment information, which could be provided to the National Transport and Safety Authority.

 

Aburili found that the requirement amounted to what she described as “a regime of continuous surveillance”. She ruled that it infringed the right to privacy under Article 31 of the Constitution and contravened the Data Protection Act 2019.

 

The court also found that requiring platforms to disclose the information on demand, without adequate safeguards, compounded the problem.

 

The regulations themselves were also found to have been introduced improperly. The court said they had been gazetted while parliament was in recess and that enforcement began before the required parliamentary scrutiny had taken place.

 

Aburili did not immediately invalidate the wider regulatory framework. She said doing so would remove provisions covering safety standards, driver verification and other requirements governing digital taxi services.

 

“An immediate nullification and ceasing to operate would destabilize the transport sector,” the judge said.

 

The wider regulations will therefore remain in force during the 12-month period while the government works to address the defects.

 

The court also considered the division of responsibilities between national and county governments. Counties retain responsibility for local transport functions, including taxis and parking, while the national government can regulate transport safety and policies affecting operations across county boundaries.

 

NTSA can therefore license digital platforms operating across counties without taking over counties’ powers over individual vehicles, drivers and local transport services.

 

If the government does not address the defects identified by the court within the 12 months, the contested provisions will cease to be enforceable.