Drivers on ride-hailing platforms such as Uber and Bolt could get a reprieve on how fares and commissions are set under proposed new competition rules aimed at curbing the abuse of market power.
The government has proposed new legislation to crack down on online platforms that exploit businesses that depend on them by unilaterally slashing prices, imposing unfair commercial terms or using their influence to dictate trading conditions.
The proposals, contained in the Competition (Amendment) Bill, 2026, are expected to place ride-hailing companies under greater regulatory scrutiny following years of disputes with Kenyan drivers over fare reductions and commission structures that the latter say have steadily eroded their earnings.
The Bill introduces the concept of a strategic market position, defining it as a situation where a company is able to influence market prices, quality, service, output or innovation to an appreciable extent independently of competitors, suppliers, users or consumers.
“A person has a strategic market position in a market if the person influences market prices, quality, service, output or innovation to an appreciable extent independent of competitors, suppliers, users or consumers,” says the Bill.
In determining whether a person holds a strategic market position, the CAK will consider factors including the firm’s presence across digital markets, control of data, network effects, switching costs, barriers to entry, financial strength and the degree of dependence by business users and consumers on its platform.
A bruising price war involving American ride-hailing company Uber, Estonia’s Bolt and local start-ups Little and Faras has driven fares down to a level that many drivers say is unsustainable, prompting some of them to defy algorithms and to set their own higher rates.
Kenya, Nigeria and Tanzania – with their growing economies and relatively low car ownership rates – are among the most important markets for Uber in Africa.
Drivers have repeatedly accused the multinational technology firms of using algorithms to determine fares in a manner that favours the platforms at the expense of those providing the transport service.
The concerns have fuelled frequent standoffs between drivers and the companies, with some motorists resorting to negotiating fares directly with passengers instead of accepting the prices generated by the applications.
Through the proposed amendments, the Competition Authority of Kenya (CAK) is seeking to regulate businesses that, although they may not necessarily dominate a market, wield disproportionate bargaining power over businesses that have few viable alternatives.
It also introduces the concept of superior bargaining position, recognising that companies can exploit trading partners because of economic dependence, even where they do not enjoy a dominant market share.
Under the Bill, “a person has a superior bargaining position in a market if the person creates an imbalance in the rights and obligations relating to its commercial relations with a counterparty and the counterparty cannot find a viable and satisfactory alternative in the market.”
Unlike existing competition law, which primarily focuses on dominant market positions, the amendments seek to regulate commercial relationships where one party possesses overwhelming negotiating leverage even in competitive markets.
The competition watchdog says the reforms are necessary because digital platforms have created new forms of market power that are not adequately addressed by the current law.
In its submission to Parliament, the agency says the digital economy has introduced unique competition concerns arising from the growing influence of large online platforms.
“The increasing prominence of large digital platforms has created risks associated with the concentration of market power, unfair trading practices, economic dependence, exclusionary conduct, and barriers to market entry,” the CAK director-general, David Kemei, told the National Assembly’s Finance and National Planning Committee.
According to the regulator, online platforms derive competitive advantages from strong network effects, access to vast amounts of user data and integrated digital ecosystems, allowing them to acquire and entrench market power more rapidly than traditional businesses.
The authority argues that this has created regulatory gaps because the existing Competition Act does not expressly provide for the regulation of competition in digital markets despite virtual marketplaces becoming a critical part of the economy.
The amendments, therefore, introduce a framework for determining whether a business holds a strategic market position in the digital economy.
The competition watchdog will also examine whether a platform acts as a gatekeeper between businesses and consumers, whether competitors require access to that platform to compete effectively, whether the company controls the rules governing the digital ecosystem and whether network effects have caused the market to tip overwhelmingly in favour of a single platform.
The concept, it says, mirrors approaches adopted in major jurisdictions that have had to grapple with the growing influence of internet giants.
In Europe, competition regulators have already relied on similar concepts in regulating companies such as Google, Apple and Meta, leading to billions of dollars in penalties over practices including self-preferencing, anti-steering rules and restrictions on competition in digital markets.
The proposed amendments would also significantly strengthen enforcement powers.
The Bill proposes a fine of up to Sh10 million, imprisonment for up to five years, or both, for a person found to have abused a strategic market position or superior bargaining position by imposing unfair trading conditions on another undertaking.
The proposed reforms come as the Ministry of Roads and Transport moves to introduce a new minimum compensation per trip for ride-hailing drivers and motorcycle operators, setting the stage for yet another showdown between the government and technology companies over pricing.
The Competition Authority is keen to address the wider imbalance in bargaining power between digital platforms and businesses that depend on them.
To address such situations, the Bill empowers the Competition Authority to develop codes of practice governing commercial relationships in sectors where abuse of strategic market position or superior bargaining position is likely to occur.
Once issued, the codes would become binding on businesses operating within those sectors, providing a framework for resolving disputes over pricing, commissions and other commercial terms.
The Authority says this flexibility will allow it to respond to rapidly evolving digital markets without having to seek fresh legislation whenever new business models emerge.
The proposals closely mirror reforms already adopted in several advanced economies.
The European Union has introduced rules targeting large digital “gatekeepers” whose platforms have become indispensable to businesses and consumers.
Companies including Google, Apple and Meta have faced regulatory action and multibillion-shilling penalties over practices ranging from self-preferencing their own services to restricting competition on their platforms.
Ride-hailing platforms have also come under increasing scrutiny.