Uganda's local taxi operators face stiff competition after entry of global online taxi firm, Uber.

The American taxi hailing service, already operating in 462 cities in 71 countries, has upset the market in these nations with its low pricing business model.

“At Uber, we are proud to connect millions of global citizens to affordable and reliable rides. By offering a friendly and reliable complement to existing transport options, we can help improve urban mobility in Kampala,” Uber’s general manager for sub-Saharan Africa, Alon Lits said Thursday during its official launch in the Ugandan capital.

Uber charges its customers for every kilometre covered unlike regular cab drivers who price based on arbitrary spot negotiations with clients. Each trip is automatically and openly priced, helping users to budget for their travel expenses.

Customers seeking the firm’s services are required to download an Uber App, which they then use to call the taxis that are registered in the platform. The app allows customers to get a driver within the same vicinity reducing transit time.

However, the low pricing model has seen Uber drivers across the globe face threats, violent protests and legal action from regular cabbies who say Uber’s cheaper fares and business model are driving them out of business.

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Uganda is the second country in East Africa after Uber launched in Nairobi early 2015 and extended its services to Kenya’s second largest city Mombasa in March this year.

With the Uganda entry, Uber now operates in five African countries including Kenya, Nigeria, South Africa and Egypt. The firm plans to launch in Ghana and Tanzania.

Uber rates

Uber has set a minimum charge of Ush5,000 (about $1.5) for rides in Kampala. Its clients will be charged a base rate of Ush1,300 and Ush900 per kilometre and an additional Ush200 per minute.

Customers will get free rides between Thursday 1pm and Sunday midnight. Cancellation of bookings will attract a charge of Ush5,000.