Effect of Competitive Strategies Adopted by Ride Hailing Companies in Nairobi, Kenya to Sustain Competitive Advantage in the Taxi Industry

Abstract

This project’s main aim is to identify the competitive strategies ride-hailing companies employ in Nairobi and their effect on the competitive advantage attained within the ridehailing sector of the taxi industry. The enhanced approaches availed through technological advancements have allowed the improving of efficiency and effectiveness in service providing industries. One such industry is the taxi industry where ride hailing applications have been adopted to differentiate the product and improve efficiency in the sector. The research employed the survey design, which enabled 60 respondents across three ride hailing service providers in Nairobi, Kenya (UBER, Taxify and Little Cab) to participate in the study. The respondents were contractors/driving partners affiliated with the three ride hailing companies listed previously. The research found that the companies mainly applied three competitive strategies; Product Differentiation, Cost leadership and Focus strategies each with a varying degree of influence on the competitive advantage attained. The study concluded that focus strategies such as availability of service across various platforms, certainty and accuracy in pricing and billing and communication and feedback between the companies their contractors and clients had a stronger impact in increasing competitive advantage gained. Cost leadership and product differentiation scored lower influence on competitive advantage due to the similarity in the product offering across the three companies. The study recommends that ride hailing companies actively train their contractors and staff to improve customer service and also, improve communication channels to allow for creative and innovative ideas from the contractors trickle back to the company.