On-demand taxi company Uber has increased its prices in the Kenyan cities of Nairobi and Mombasa by 20% as it looks to achieve the right balance between drivers and customers.

Uber first launched in Nairobi in 2015, adapting to the local market by allowing users to pay for their rides with cash, and is facing stronger competition following the recent launch of Safaricom's Little.

It has now increased its fares by 20%, saying its strength as a technology company was that it can move and adapt quickly based on what works best for each city.

"With six years' experience, we have seen that pricing is all about achieving the right balance ultimately, prices are designed to encourage more riders on the road, to help increase trips for drivers, but equally, you want to make sure the basic economics of drivers are sustainable," Uber said in a statement.

Per kilometre fares in Nairobi have increased to KES42 from KES35, with the base far remaining at KES100 and the per minute fare still KES3. The minimum fare has risen to KES300 from KES200.

The same per kilometre increase has been made in Mombasa, where the base fare has also increased to KES70 from KES50. The minimum fare has also increased, to KES200 from KES150.

Uber said it believed any decision on pricing needed to be data-driven, using statistically proven methods to determine pricing. It said it had considered local conditions together with a pricing model used in more than 450 cities across the world.

"We have always promised to closely monitor driver-partner's economics; keeping cognisant of how inflation and fuel prices can affect drivers using our app. We continue to stand by that promise because Uber succeeds when our partners succeed," the company said.

"That is why today we are raising our prices in Kenya. We believe driver-partners will earn more as a result of these changes and that riders will continue to enjoy access to a safe, affordable and reliable service."

Uber has also been facing some challenges in South Africa recently, with Johannesburg taxi drivers last week blocking roads to OR Tambo International Airport in protest against the ride-hailing app.

Uber has faced protests by taxi drivers in cities across the world over its business model and the impact it is having on the traditional taxi business.