Taxi drivers of ride-hailing apps Uber, Taxify and Little are a worried lot as banks have set up plans to re-claim vehicles from those who have difficulties with their loan settlements.
In the last one week alone, 230 vehicles all over Kenya have been advertised for auction including commercial vehicles and high end saloon cars.
Recently, Stanbic Bank advertised 72 vehicles that have been lined for the auction including 31 Suzuki altos that belong to Uber Chap Chap drivers who have failed to pay their loans.
In 2018, the lender entered a partnership with Uber and CMC motors to offer drivers with the Sh 835,000 budget vehicles at 14 per cent interest with interest payment of over three years.
On Thursday, Satanbic noted that the funding partnership with Uber was ongoing and that a number of drivers have completed payments.
But, COVID-19 has affected incomes for a number of drivers with the bank reorganising some services.
In a statement seen by the Standard, the bank noted, “Due to the impact of Covid-19, our Vehicle and Asset Financing unit has supported the restructures to more than 460 vehicles owners worth approximately Sh 1billion.’’
“We continue to assess the market and discuss with our customers how we can support them. Part of the help includes requests to enter private treaties.”
Digital Taxi Association of Kenya Chairman David Muteru said ride hailing drivers are facing a rough time financially as a result of Covid-19 control measures enforced in the last three months.
“While other people could stay at home, taxi drivers could not,’’ he elaborated. “Saccos and microfinance institutions had given us three months. Once that grace period lapsed, they came for the vehicles,” he noted.
Uber on its part noted that they extended help to its drivers by way of educating them on appropriate measures for settlement with their lenders in line with current advice from the Central Bank of Kenya.
“We have also reached out to preferred vehicle partners to assess their support to drivers in need, through reducing the overall cost of their vehicles,” read a statement from Uber.
Other than Stanbic, NCBA Group has also listed 51 commercial and personal vehicles for auction reflecting a disturbing pattern for anxious borrowers.