Uber exits Tanzania as pricing rules squeeze ride-hailing model

Ride-hailing giant Uber has exited Tanzania, telling riders it would stop operating from 30 January 2026 after years of clashes over fares, commissions and regulatory control. The pullout tests how far a global ride-hailing model built on flexible pricing can work under tight state fare rules.

Uber’s departure narrows options for riders in Dar es Salaam and other cities, leaving more room for local and regional apps like Little and Bolt, which have adapted more easily to Tanzania’s regulatory framework.

“After careful consideration, Uber has made the difficult decision to discontinue the Uber App services in Tanzania from 30 January 2026,” the company said in a message to customers last week, which it also shared with TechCabal on Monday. “We remain deeply committed to the region and continue to focus on creating reliable mobility solutions and economic opportunities for drivers and communities.”

The exit follows a long-running dispute with the Land Transport Regulatory Authority (LATRA), which regulates ride-hailing more like traditional transport than an open marketplace. LATRA sets guide fares, minimum trip prices and caps what platforms can take from drivers—rules that limit how companies adjust prices, commissions and incentives when fuel costs shift or demand changes.

For platforms that typically charge 18-30% commissions and use fare changes and bonuses to balance supply and demand, those limits strip away the core tools that support the model.

Tensions peaked in 2022 when LATRA introduced fixed guide fares per kilometre and per minute, set a minimum fare and imposed a 15% commission ceiling, down from about a third. After booking fees were scrapped, Uber halted operations that April, saying the model was no longer workable in Dar es Salaam, Dodoma, Arusha, Mwanza and Zanzibar.

In early 2023, regulators eased the framework, allowing commissions to rise to around 25% and restoring a small booking fee. Uber resumed service soon after, but that episode left operators facing the risk of sudden rule changes and close oversight of pricing.

This time, Uber’s exit leaves Tanzania’s ride-hailing market with fewer international players. Some global competitors had already scaled back during earlier disputes, while local and regional apps such as Little continue to serve mass-market riders, often relying on cash payments and lower commission expectations that align with LATRA’s structure. 

Bolt, Uber’s closest global rival in many African markets, shifted more towards corporate clients in Tanzania during the height of the pricing dispute.

Uber’s exit is likely to affect pricing behaviour and availability. Promotional fare cuts and coupon campaigns depend on investor funding and larger commission pools. With fewer global players willing to subsidise trips, riders outside central areas may experience longer wait times during peak periods, even as regulated fare bands limit sharp price increases.

A lower commission cap means drivers keep a larger share of each trip. It also changes the incentive structure because when large platforms scale back, sign-up bonuses, guaranteed earnings and off-peak top-ups tend to decline. 

Many drivers already work across multiple apps to secure enough trips. That pattern may deepen as they spread their hours across smaller platforms to protect daily income under tighter margins.

Uber’s pullout leaves demand for app-based rides still present, but removes the largest international brand from a market where the state now plays a central role in setting the economics of each trip.